ITEX (Largest US Barter Co.) Offered $21 Million By Western Sizzlin
December 27th, 2007 · by Bob Meyer · 2 CommentsWestern Sizzlin Corporation (OTC Bulletin Board: WSZL) today announced that it has commenced an exchange offer for all outstanding shares of (barter company) ITEX Corporation (OTC Bulletin Board: ITEX). The exchange ratio for the offer is .06623 shares of Western common stock for each outstanding share of ITEX common stock. Following completion of the exchange offer, Western intends to consummate a second-step merger in which each remaining share of ITEX common stock would be converted into the right to receive the same number of Western shares as paid in the exchange offer.
On December 26, 2007, the closing price of a share of Western common stock was $18.00, whereas the closing price of a share of ITEX common stock was $0.96. Based on these closing prices and the exchange ratio in the offer, the Western offer has a value of $1.19 per ITEX share and a total transaction value of over $21 million.
This figure represents a 24% premium over ITEX’s closing share price on December 26, 2007, a 38% premium over ITEX’s six-month average closing share price through December 26, 2007 and a 48% premium over ITEX’s one-year average closing share price through December 26, 2007. Western has applied to have its common stock listed on the Nasdaq Capital Market.
The exchange offer is scheduled to expire at 5 P.M. New York City time on Thursday, January 31, 2008, unless extended.
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December 27th, 2007 at 3:13 pm
Hello Bob more of a question than a comment, wondering why a steak house chain would buy a barter company?
December 27th, 2007 at 4:18 pm
Western contends that its holding company structure would allow surplus cash generated (from other subsidiaries & ITEX) to be used in other investments, including the acquisition of other barter companies.
Western believes additional cost savings would be attained by eliminating the redundant “public company” costs and that such savings would translate into a higher value of Western’s stock (greater market capitalization).
Additional barter opportunities (more business)for ITEX would result through Western’s other subsidiaries, as well as future acquisitions using the ITEX network.
Western anticipated listing on NASDAQ, moving up from the OTCBB, would enhance liquidity and reduce transaction costs for stockholders enterting & exiting the stock.
And Western believes their “holding company structure” is the ideal model, and would provide ITEX with the ability to focus on the day-to-day operations, letting Western handle the capital allocation responsibilities.