Thesis VS. Project

I am doing an undergraduate thesis, also on M&A but what I learned through the process is ALL M&A research is BS... If banks or companies cared about what the research says they would know that the deal is dilutive and not do it.

Apart from that your either talking about qualitative nonsense or attempting to quantify a largely human process. Also these skills are not transferable to M&A.

Between the two, do the pseudo internship, please.

However, depending on the degree of lameness for the M&A internship, You may want to consider doing a thesis on some form of asset pricing (something actually quantifiable!) related to corporate finance, Such as CDS sensitivity to commodity price or leverage - Just don't try and solve the equity premium puzzle.