pod install Pull is not possible because you have unmerged files.
http://stackoverflow.com/questions/21474536/podfile-gives-an-error-on-install
A bug was found in libgit2 and they had to execute a force push on the specs repo. This is what broke everyone's CocoaPods setup.
You can find the official post about this issue on the CocoaPods blog :http://blog.cocoapods.org/Repairing-Our-Broken-Specs-Repository/
The recommended way to fix your setup is to execute the following commands :
$ pod repo remove master
$ pod setup
If that doesn't work, you can also delete manually all your cached specs :
$ rm -rf ~/.cocoapods/
$ pod setup