Microscopic takeover bid drags on

The takeover attempt plods along for months.

The target company's CEO resists the bid and disparages the bidder.

The would-be acquirer's stock slides, devaluing its currency for the proposed deal.

Microsoft and Yahoo? No, this is the other takeover battle that has riveted the Eastside — the epic contest between Bellevue-based Itex and the Virginia-based company that offered to acquire it, Western Sizzlin.

OK, we exaggerate. It's not epic. Nobody is riveted. Nobody, to be blunt, has heard of either company.

If Micro-hoo was the earth-rattling stomp of two business elephants tussling over a lush pasture, this other contest is the tap dance of two corporate ants competing for a grain of rice. Or one ant and one mosquito, since Itex runs a barter system and Sizzlin franchises restaurants.

Itex stock has a total market value of just $17 million; Sizzlin is twice that. Microsoft probably spends greater sums on pencils.

But the strategic maneuvering, and the trash talk, is almost as interesting on this microscopic level.

"Personally, I think the [Sizzlin] tender offer is an insult to the intelligence of Itex shareholders and the hard-working individuals of our organization," wrote Itex chairman and CEO Steven White in a February message to investors.

White knows a thing or two about corporate combat. He sold a company to Itex, becoming a big shareholder, then grew dissatisfied with its management and waged a successful proxy fight in 2003 to replace its directors and fire its top executives.

He's grown the Itex barter system (or cashless business transaction network, as they call it) to 22,000 member businesses who last year exchanged goods and services valued at more than $270 million.

Itex's operating income has risen for four years, to $1.5 million in 2007.

Sizzlin operates five restaurants and franchises about 120 more, the nearest being in Colorado. Its restaurant income has fallen 63 percent in two years to $507,000, and misadventures in other investments pushed the company into the red for 2007.

Sizzlin's shares only graduated to trading on Nasdaq in late February — two months after it first offered to buy Itex — and they have fallen steadily since then.

So who will prevail in this battle of the tiny titans?

Sizzlin, which has extended its deadline several times, recently said it would be satisfied with buying a 15 percent stake in Itex.

Shareholders so far have agreed to sell it only one-third that amount.

This past week Itex hired an investment bank to "evaluate strategic alternatives," suggesting more moves lie ahead.

Looking for a Microsoft angle? It takes a keen-eyed researcher to spot it.

The acquisition-hungry Sizzlin, which has some Texas connections, recently agreed to buy control of a small investment company in Houston.

The investment firm's chief declared that the two top executives at Sizzlin are "the closest thing we have in South Texas to Warren Buffett and Charlie Munger."

And who is Warren Buffett's best billionaire friend? That's right: Bill Gates.

Oil producer Norway

keeps own price high

Think gas prices in the U.S. are high? Try $9 a gallon.

That's about how much gas costs in Norway these days, but people are used to it, said Norway's ambassador to the U.S., Wegger Strommen, during a visit to Seattle this past week.

Why does the world's third-largest oil exporter have such expensive gasoline? Taxes account for around two-thirds of the price — they are meant to discourage fuel consumption.

But Norwegians don't have long distances to drive and don't drive big gas-guzzlers. And oil wealth has helped enrich their salaries, which shot up about 33 percent over the last five years, said Strommen.

Oil and gas revenues are a major source of funding for the country's budget but also a challenge, the ambassador said.

"There's no way we can spend the amount of money that we bring in," he said.

Most of the revenue goes into a government investment pool, known as a sovereign wealth fund, that is $400 billion and growing; one-third is invested in the U.S., he said.

"Some people are worried about sovereign wealth funds in this country," he said. "We think our fund is a good thing for the American economy."

The oil boom won't last forever. Norway is making a big push into carbon capture and sequestration, and technology for floating offshore windmills, Strommen said.

REC Solar, one of the largest companies on the Norwegian stock exchange, produces solar-grade silicon in Moses Lake and is trying to expand the plant's capacity.

Unless the world changes its carbon-spewing ways, Norway could feel a big chill, though.

The warming of average global temperatures could have the opposite effect in Norway, making temperate parts of the country colder.

"It's hard to see a way out of this unless there is new technology," Strommen said.

— Kristi Heim

Comments? Send them to Rami Grunbaum: rgrunbaum@-

seattletimes.com or 206-464-8541