The Division of Enforcement of the Securities and Exchange Commission has notified NexCen Brands Inc., parent company of two retail brands and five quick-service brands, it has completed its two-year investigation of the company and does not intend to recommend any enforcement action by the commission. The investigation related to the circumstances surrounding the company’s January 2008 financing of its acquisition of Great American Cookies and the company’s public disclosures about the terms of that financing.

"We are pleased that the SEC has concluded its investigation of the company and is recommending that no action be taken by the commission," said Kenneth J. Hall, CEO of NexCen Brands. "This favorable outcome is a significant step towards putting this matter behind us."

NexCen Brands takeover update

NexCen Brands is in the midst of a takeover deal, which it announced in May, in which an affiliate of independent investment firm Levine Leichtman Capital offered to buyout the company for $112.5 million. The nation's leading independent proxy advisory firms Glass Lewis & Co. and ISS Proxy Advisory Services have recommended that NexCen Brands' shareholders vote "for" the sale of its franchise business as well as "for" the additional proposals in the company's June 11, 2010, proxy statement.

In recommending that NexCen shareholders vote "for" the proposed asset sale and dissolution, Glass Lewis said:

• The NexCen "board conducted a thorough evaluation of strategic alternatives that involved multiple interested parties prior to entering into the [asset sale] agreement."
• "If the asset sale is not completed, it appears that shareholders may receive little or no value at all from any remaining alternatives, such as bankruptcy protection."
• "While it is never ideal for shareholders to be forced to undergo a liquidation/dissolution event, in light of the Company's limited alternatives and the anticipated cash distribution to shareholders, we believe the proposed asset sale and dissolution are in the best interest of shareholders."

Last week, ISS recommended its client vote "for" the asset sale and other proposals on the agenda. In its analysis, ISS concluded by stating that "non-approval of the liquidation transaction would likely result in foreclosure of NexCen's assets by its creditors or bankruptcy, both of which would wipe out shareholder value. Therefore, the asset sale and liquidation transaction is preferable."

Under the terms of the sale agreement, LLCP's affiliate, Global Franchise Group LLC, will acquire the subsidiaries of NexCen Brands that own the franchise business assets, the company's franchise management operations in Norcross, Ga., and its manufacturing facility in Atlanta. NexCen Brands QSR concepts include Great American Cookies, MaggieMoo's, Marble Slab Creamery, Pretzelmaker and Pretzel Time.

As set forth in the company's proxy statement, NexCen estimates that assuming that the asset sale is completed on its current terms and the company is dissolved, the cash proceeds ultimately available for distribution to the holders of NexCen common stock will be between $0.12 and $0.16 per share of common stock. However, NexCen is unable to predict the exact amount, nature and timing of any distributions to its shareholders. Closing of the sale is subject to various conditions, including approval of the shareholders of NexCen Brands.

The transaction is expected to close promptly following the receipt of shareholder approval. Shareholders of record as of the close of business on June 4, 2010, are entitled to vote at the company's July 29, 2010,