"Then there is the shorts, whom many assume will have to cover."

I think the short covering will happen and it will help bringing the warrant earlier in the money than would have happened without the merger.

All the reasons I bought the ECU warrants in the first place were mentioned by Gildage. Your additional point maybe a positive for the short term movement of the share price and thus the warrant. That expectation might also make the warrant more in demand short term, which is probably why Coach was so happily picking up warrants on Friday.