The many short-sellers of

Blue Rhino

(RINO)

were taking it on the chin Monday morning after the company agreed to be acquired by Ferrell Cos. for $17 a share in cash.

The assets of Blue Rhino, which operates propane-tank exchange centers, will be taken over by

Ferrellgas L.P.

(FGP) - Get Report

, whose general partner is controlled by Ferrell Cos. The price tag comes out to about $340 million.

Blue Rhino's 10 million-share float is more than 25% shorted, with insiders owning another 44%. The shares were recently up $2.79, or 20%, to $16.69. Ferrellgas shares also rose modestly on the

NYSE

.

Blue Rhino operates propane-exchange centers at more than 29,000 retail locations in 49 states. It will keep its name and remain headquartered in Winston-Salem, N.C.