Saudi Arabian sports and fitness business Leejam Sports Co is targeting an initial public offering in the fourth quarter in a share sale expected to raise 1 billion riyals ($266.65 million), sources familiar with the deal told Reuters on Tuesday.

The company hired the investment banking arm of Samba Financial Group and Rothschild last year to arrange its share sale, which will see 30 per cent sold to the public and a listing on the Tadawul stock exchange based in Saudi Arabia’s capital, Riyadh.

Leejam, established in 2007 by vice-chairman Abdul Mohsen Al Haqbani, operates 120 locations across Saudi Arabia and Dubai under the brand name Fitness Time, according to its website.

The company plans to formally apply for an IPO with the stock market regulator, the Capital Market Authority, in the coming weeks, according to a banking source, who spoke on conditions of anonymity because the matter was not public.

A second banking source said the company was IPO-ready and had completed all the required processes for the listing except the official request to the regulator.

Much of the shares put up for sale will likely to come from Bahraini alternative investment firm Investcorp, sources told Reuters in May last year.

Investcorp, which acquired a 25 per cent stake in the firm in 2013, declined to comment when contacted by Reuters. A spokesman for Leejam Sports did not immediately respond to a request for comment.

($1 = 3.7503 riyals)