You are correct. Even without the contract, the stock would be fairly priced at this level. So you are getting the stock, plus a pretty strong option at renewal.
The news out today is actually pretty weak. Essentially a leak of one of a dozen opinions that will be taken into account regarding the renewal of the contract.
For me it is actually quite simple. The US will not allow that a foreign entity control key phone data and infrastructure within the US. The US spied on Germany, why would Europe not reciprocate the favor? National security trumps all economic concerns. At most I expect Neustar will have to negotiate down its pricing. Nothing too tragic.
So again, a this price level you are getting the company and a free option at what I consider a high probability of retaining the contract. Very little downside, and the potential for at least 1.0x your money in six months.