UPDATE: Colombia's EEB Shares Rise After Three-Day Suspension

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 He noted that he originally made the merger proposal months ago during his campaign.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; [e-mail]