The Toronto-based company said Wednesday that it has indefinitely adjourned a debtholder vote on a refinancing plan.
"We are working diligently to reach an acquisition agreement and thank our customers, dealers, employees and partners for their continued support as we see this process through to its completion," president and chief operating officer Stewart Lyons said in a statement.
Lyons did not identify the possible bidders or disclose any other details on the discussions for Mobilicity, which has about 250,000 cellphone subscribers.
There were unconfirmed reports that Mobilicity was holding talks with wireless giant Verizon, which has almost 100 million customers in the United States.
"Verizon is not commenting on this," spokesman Robert Varettoni said Wednesday.
The U.S. company also has reportedly made an initial $700-million offer for Wind Mobile, another of Canada's small telecoms.
But Wind Mobile CEO and chairman Anthony Lacavera, who owns a 35 per cent stake in the company he founded, has said he's also interested in buying Mobilicity and the rest of Wind that he doesn't already own.
Lacavera said he still believes that Wind and Mobilicity need to merge into one company and that combined they would have a good block of spectrum — radio waves over which cellphone networks operate — to build out a faster, next-generation network.
"I'm a competitive bidder in the process and I maintain my enthusiasm to buy the assets myself," he said of Mobilicity.
Telecom analyst Iain Grant said it's in the best interests of Mobilicity's debtholders to have a "horse race."
"Even if there wasn't, you would want to create the impression there was," said Grant, managing director of the SeaBoard Group.
It also still makes sense for the Wind Mobile founder to put in a bid for Mobilicity, either by himself or with a partner, and merge it into his company, Grant said.
Private equity firm Catalyst Capital Group, one of Mobilicity's major bondholders, could also be interested in acquiring Mobilicity and so could another international telecom company, Grant said.
"If you're thinking about dark horses, throw EastLink and Videotron in to the mix," he added.
Catalyst which reportedly holds more than $50-million of Mobilicity's senior debt couldn't be reached for immediate comment.
Mobilicity also noted that it still has the right to reconvene a vote on its refinancing plan after giving notice to debtholders.
Under the recapitalization plan, the share capital of the company would be reorganized and certain debt repaid and Mobilicity would get funds to continue operating.
Mobilicity had pushed back the vote twice before postponing it indefinitely.
Together, Wind and Mobilicity have just over 850,000 subscribers between them, a fraction of the combined 25 million held by the country's big players, Rogers (TSX:RCI.B), Telus (TSX:T) and Bell Inc. (TSC:BCE).
Mobilicity had earlier been the willing target of a $380-million buyout offer from Telus.
But federal Industry Minister Christian Paradis quashed that idea last month, saying the government would let stand current rules that prevent the sale of Mobilicity's spectrum licence to one of the larger companies before 2014.
Formerly known as Data & Audio-Visual Enterprises Wireless Inc. (DAVE Wireless), Mobilicity provides no-contract cellphone service in Toronto, Ottawa, Calgary, Edmonton and Vancouver.