Event-Driven Hedge Fund Strategy Evaluation

John is an investment analyst at a hedge fund that specializes in event-driven strategies. Recently, he is analyzing a potential investment in a company that is subject to an acquisition by a larger firm. The larger firm offered a premium over the current stock price, and John anticipates that the deal will close within the next six months. He is considering how the hedge fund should position itself to capitalize on anticipated stock price movements and potential risks associated with the acquisition.

Which of the following strategies should John recommend to maximize the fund's returns while minimizing risk associated with the merger?