Foundation Coal: I Think I'll Pass

Normally I jump to invest in a merger arb situation where both parties agree to close. Alpha Natural Resources' (ANR) purchase of Foundation Coal (FCL) is a tempting opportunity:

Alpha Natural Resources said Tuesday it plans to buy rival Foundation Coal for about $1.4 billion in stock in a deal that would transform two regional companies into the nation's third-largest coal producer.

This time I think I'll pass. My problem is that it's an all-stock deal, so the final value of FCL (against which I'd normally write an uncovered call option) depends completely on the value of ANR. I'd rather not take the risk of getting called.

Nota bene: Anthony J. Alfidi holds no position in ANR or FCL.