CANADA STOCKS-TSX drops as big BCE deal in jeopardy
* BCE deal in doubt, shares drop 37 percent
* Energy group ekes out small gain as oil price rises
* National Bank of Canada warns of further ABCP charges
TORONTO, Nov 26 (Reuters) - The Toronto Stock Exchange's main index dropped 1.7 percent on Wednesday as the big leveraged buyout of BCE (BCE.TO: Quote) looked to be in jeopardy, while a gloomy corporate and economic outlook weighed on sentiment.
Shares of BCE, Canada's biggest telecom company, sank about 37 percent to C$24.32 after it said the world's largest leveraged buyout may be in jeopardy. [ID:nN26331920]
BCE, which accounts for about 3.5 percent of the index and was the most heavily traded stock on Wednesday, said that it was unlikely to close the C$34.8 billion deal after its accountants said that the company that would emerge from the buyout would not pass a solvency test because of its huge debt load.
"I don't know what they might do to put some breath in this and try to keep this thing alive. I don't think the bankers will negotiate after this to be perfectly honest. They could reprice it but I don't think that it will happen," said Steve Ibel, an institutional equities trader at Beacon Securities, in Halifax, Nova Scotia.
"I'm surprised the Canadian markets aren't being pushed down a little bit more...But oil and gold, materials are buffering some of the negative BCE impact."