This morning, Arch Coal (NYSE: ACI) agreed to acquire Gushers Portfolio holding International Coal (NYSE: ICO) in an all-cash deal worth $13.4 billion, or about $14.60 in cash per share. That’s a roughly 30 percent premium to the stock’s most recent closing price.

I added International Coal to the model Portfolio in a Flash Alert issued on Dec. 20, 2010, citing three factors. First, the company vastly improved its financial position in late 2009 and early 2010 by eliminating much of its excessive debt and replacing that financing with equity. Second, the company plans to open new mines and expanding existing operations, moves that will significantly increase the quantity of high-value metallurgical (met) coal it produces. Finally, there was a 50-50 chance that International Coal would be acquired in 2011.

Arch Coal purchased International Coal to gain access to the company’s expanding met coal production. Thanks to an improving outlook for the global met coal market, the premium on this deal exceeds what I had expected in December 2010.

International Coal’s shares now trade at just a 20-cent discount to the deal price. This reflects the time that it will take for the deal to close and the remote possibility that the acquisition could be terminated for some reason. Don’t wait for around for another 20 cents. Sell International Coal and book a 105 percent gain in a little more than four months.