Colombia's ETB Shares Down 24% As Co Stops Search For Partner

Shares of Colombian state-controlled telephone company Empresa de Telecomunicaciones de Bogota SA (ETB.BO), or ETB, lost 24% Thursday morning after the company said it halted the process to sell a controlling stake to a private partner.

ETB, which is controlled by Bogota's city council, was planning to hold an auction on Sep. 15. Prequalified bidders had until Wednesday to file offers and none did, ETB said in a filing to the Colombian stock and bond regulator.

"The company will keep on working to add value for its shareholders," ETB said in the filing. Shareholders weren't impressed, though, as the share price fell 24% as of 11:25 a.m. New York time to 830 Colombian pesos ($0.46), its lowest point since May 2009.

Andres Jimenez, a market analyst with local brokerage Interbolsa, said the shares may drop to below COP700.

ETB urgently needs investment to be able to compete with larger and financially stronger Telefonica SA (TEF) and Telefonos de Mexico SA (TMX), or Telmex. The competition has brought all telecom fees down over the past few years and both Telefonica and Telmex have won market shares in Bogota, where ETB used to dominate.

The Bogota city council was planning to sell new voting shares in the company to the new partner and change its own shares into non-voting, which would have given the new partner the control of the company.

ETB hadn't released the list of possible bidders though Spain's Telefonica SA (TEF) had asked Colombian anti-trust authorities whether a merger would be possible and the answer was "yes".

Besides Telefonica, Telmex as well as Millicom International Cellular SA (MICC) were mentioned as possible bidders.

Andres Perez, the company's general secretary, didn't return phone calls seeking comments.

-By Inti Landauro, Dow Jones Newswires; 57-1-694 00 76; [e-mail]