UPDATE: Colombia's EEB Shares Rise After Three-Day Suspension
December 13 2011 - 9:37AM
Dow Jones News
Shares of Colombia's state-run power company Empresa de Energia
de Bogota (EEB.BO) rose sharply Tuesday as trading resumed
following a three-day suspension due to a sharp decline in its
share price.
Shares of EEB, which is majority-controlled by the city of
Bogota, were up 4.3% to 1,095 pesos. The shares fell 17% between
Monday and Wednesday of last week after Bogota Mayor-elect Gustavo
Petro told local press he plans to merge money-making EEB with
money-losing telecommunications firm ETB (ETB.BO), which is also
controlled by the city.
Colombia's stock-market regulator decided to halt trading midday
Wednesday for three business days, saying it wanted to protect
investors.
The regulator and the company have since sent statements
indicating that EEB is a solid company. But analysts say those
statements miss the point since the price decline wasn't related to
EEB's financial situation and more the result of the incoming
mayor's plan to merge EEB with ETB.
Analysts at Celfin Capital said investors feel slighted by the
plan because ETB is "crying out for cash amid fearsome competition"
from the local units of Spanish telecommunications company
Telefonica SA (TEF, TEF.MC) and Telefonos de Mexico SAB de CV
(TFONY, TMX).
Petro stands by the merger plan and said his comments about a
tie-up aren't the cause of the share price decline. He noted that
he originally made the merger proposal months ago during his
campaign. Petro has asked regulators to investigate the "true"
causes of the decline.
-By Dan Molinski, Dow Jones Newswires; 57-310-867-6542;
dan.molinski@dowjones.com