The Pantry Inc. (NASDAQ: PTRY) announced Thursday morning that it had entered into a definitive merger agreement with Couche-Tard. It will be an all-cash transaction that is worth $36.75 per share, equaling a total enterprise value of $1.7 billion, including debt assumed.

Shares of The Pantry soared Wednesday to close 23% higher at $35.52 on rumors of a buyout that were later confirmed Thursday morning. This is roughly a 27% premium from the close on December 16, before the reports that the deal was underway. The transaction is expected to be completed within the first half of 2015.

The big question is whether The Pantry shareholders are getting enough. Those shareholders who bought shares recently are making out like bandits, but that is not the case for those who owned the shares since before the Great Recession. From 2002 to 2006, The Pantry shares rose from less than $10 up to over $60 for a brief period. Then shares started their slide, even before the recession. From early 2008 until summer of 2014, this stock spent most of its time stuck in a range of $10 to $20.

This is one of those situations in which new shareholders who bought any time since the recession are getting a great premium buyout. It is those long-term holders who might not be so happy here — and it is not like they have gotten big dividends to entice them. The Pantry paid no dividends along the way.

Brian P. Hannasch, Couche-Tard’s president and CEO, said:

We look forward to welcoming The Pantry, Inc. to the Couche-Tard family. The Pantry is an excellent company and is well positioned in the Southeastern and Gulf Coast regions of the U.S., two of the fastest growing areas of the U.S. With this transaction we will add more than 1,500 stores to our network which will position us as the definitive leader in this region and will reinforce our position as one of the largest convenience store operators in North America. We look forward to combining the capabilities of The Pantry team with Couche-Tard to enhance value for our shareholders. We strongly believe that our all-cash offer is compelling for The Pantry’s shareholders as it offers them the opportunity to realize full and immediate value for their investment.

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Dennis Hatchell, president and CEO of The Pantry, said:

I am very proud of The Pantry employees and what they have accomplished. The company’s current performance is a direct result of the employees’ hard work and effort. Their work has clearly been recognized by the marketplace and by Couche-Tard, culminating in this transaction. This is an exciting combination of two strong companies that complement each other extremely well. Unlocking the strategic value of these combined firms will benefit the current Pantry shareholders and provide ongoing opportunities for most of our employees. I sincerely thank and appreciate each of the employees for their contributions to the success of this organization.

In Thursday’s premarket trading, shares of The Pantry were up over 2% to $36.30. The stock has a consensus analyst price target of $26.50 and a 52-week trading range of $12.30 to $36.71.

This buyout represents a good premium for new shareholders. For older shareholders who held on to a top convenience store franchise with more than 1,500 stores, they just might not be ecstatic about this deal.

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