The only external 1-2-3 file converter I know is:

http://www.dataviz.com/products/conversionsplus/

Whether it does a better job with formatting, etc. than Excel I do not know.
I also do not know whether this program handles the newer .123 file format.
The website is ambiguous in my opinion but a telephone call should solve
that. However I gather your concern is WK4 files so perhaps this isn't an
issue.

It does not convert macros however. Macros must be re-written in VBA.

--
Jim Rech
Excel MVP