As expected, the ITEX board has rejected the WSZL offer:
ITEX Board Recommends Shareholders Reject Western Sizzlin Offer
Friday January 11, 5:58 pm ET
BELLEVUE, Wash., Jan. 11 /PRNewswire-FirstCall/ -- ITEX Corporation (OTC Bulletin Board: ITEX - News), The Membership Trading Community(SM), a leading marketplace for cashless business transactions in North America, today announced that its Board of Directors has unanimously recommended that ITEX shareholders reject Western Sizzlin Corporation's (OTC Bulletin Board: WSZL - News) unsolicited offer to acquire all outstanding shares of ITEX for consideration consisting of .06623 shares of Western Sizzlin common stock, and not tender their shares to Western Sizzlin.
"The ITEX Board determined that Western Sizzlin's offer undervalues ITEX and that an all exchange offer with an illiquid stock is far too risky," explained Steven White, ITEX Chairman and Chief Executive Officer. "The Board believes that, in light of ITEX's future prospects, the interests of the shareholders will be best served by ITEX continuing to pursue its strategic plan. We compared ITEX's steadily improving operating performance over the last four years with the falling sales and decreasing cash flow of Western Sizzlin, and believe the consideration being offered by Western Sizzlin is uncertain and potentially illiquid."
ITEX filed a Schedule 14D-9 with the Securities and Exchange Commission today, which sets forth the reasons for the Board's recommendation and other information. These reasons include, among others:
-- The Board's belief that the Offer does not fully reflect the long-term value of ITEX's strategic plan, including its future growth prospects, and that ITEX's value is not yet fully reflected in its stock price;
-- The Board's belief that the Offer is disadvantageous to ITEX's shareholders and any proposed benefits of a combined company are uncertain;
-- The Board's belief that the value of the consideration being offered under the Offer is uncertain, illiquid, and fully dependent on the future value of the Western Sizzlin common stock.
Mr. White continued, "After conversations with Western Sizzlin's CEO this week, we believe our strategies are totally different on the direction of ITEX. Our desire is to continue the process of building ITEX by executing our strategy; bringing increased value to all our stakeholders."
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