Shares of Colombia's Empresas de Telecomunicaciones de Bogota SA (ETB.BO), or ETB, fell 8% in recent trading after the company on Tuesday said a court upheld an order to suspend the search for a controlling partner.

On Sept. 22, the court had ordered ETB, which is controlled by the Bogota city council, to halt a process to seek a controlling partner on the request of the labor union, which fears massive layoffs if a private operator takes the company over.

ETB's share price plummeted 8% to 915 pesos ($0.50) as a result of the court decision, Johanna Castro, a market analyst with local brokerage Corredores Asociados said.

The shares are down 29% since the lawsuit started in mid-September.

"The process to seek a partner is all but paralyzed until the lawsuit ends," Castro said. "We consider the shares aren't worth more than COP970 or COP1,000 at most."

ETB plans to sell new shares, equivalent to a 36.6% stake, to a new partner, in a public auction.

The city council then plans to convert its current shares into non-voting shares. The new partner must commit to holding a tender offer to buy out minority shareholders at the same price as offered in December. If all minority shareholders accept the offer, the partner will end up with a stake close to 49%, but with a majority of voting shares.

ETB's share price has climbed over the past few months on expectations the new partner would pay a significant premium to gain control of ETB. Between July 6, when the company announced its search for a partner, and mid-September ETB's shares had gained 41%.

The Bogota city council now holds 86.59% of ETB, while minority shareholders have the remaining 13.41%, according to the company's Web site.

-By Inti Landauro, Dow Jones Newswires; 57-1-610 70 44 Ext. 1131; colombia@dowjones.com