The divestment of Pogo’s Canadian business, NorthRock, is done. Will the Plains/Pogo deal close now? S&P’s comment when it was announced hinged upon whether it would close. S&P put Pogo on CreditWatch Negative, which is unusual. Normally, the seller’s debt is put on CreditWatch carrying the weight of the buyer’s rating. In this case, Plains and Pogo have the same rating. The S&P report suggests that, if the deal does close, Plains’ credit rating will be lowered by taking on Pogo and its debt, thus the Pogo debt will have a lower score. But what’s with the question mark on if the deal closes? Plains didn’t close its acquisition of Stone Energy last year. The market responded hugely negatively to the announcement, sending PXP stock down, down, down. Sources liked to cite that at the time, saying the market slammed the stock. Truth is, that very day and in coming days, all energy stocks were beaten back. The market decided natural gas prices were going down and were staying down (the market was right). It is true, however, that Plains’ stock fell relatively more than those of its peers. So, Plains let Stone out of its deal when Energy Partners made a better bid, and then Woodside bid for Energy Partners and said it wouldn’t do the deal if Energy Partners closed its purchase of Stone…. Here is the summer of 2007, and Stone continues on, Energy Partners continues on, Woodside continues on and Plains does as well. Will the Plains/Pogo deal close? Dan Loeb is a major investor in both. No matter what happens, Third Point LLC hedge fund should fare well. What’s your view?