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UPDATE 1-Akzo Nobel: Elliot Advisors will end legal action, support board nominations

nominations@ (Updates with details)

AMSTERDAM, Aug 16 (Reuters) - Akzo Nobel said on Wednesday it has reached an agreement with its largest shareholder, Elliott Advisors, committing the hedge fund to put legal actions against the Dutch paints company on hold and to support its board nominations.

Under the agreement, Elliott will also support Akzo's decision to sell its Speciality Chemicals division, which represents about a third of sales and profits.

Akzo has been at odds with Elliott since the Dulux paintmaker rejected advances for a 26 billion euro ($30.52 billion) takeover by U.S. rival PPG Industries. Elliott, which owns 9.5 percent of Akzo, sought unsuccessfully to have Chairman Antony Burgmans removed by legal action.

Akzo said in a statement Elliott has now agreed to support the nomination of new CEO Thierry Vanlancker and two supervisory board members. Akzo promised to give Elliott and other major shareholders a say in naming a third supervisory board member.

Gordon Singer, CEO of Elliott Advisors (UK) Ltd, welcomed the agreement in the statement, saying it marked "an important next step in ... enabling the company to deliver compelling value to all its stakeholders."

PPG made three takeover proposals for Akzo in March and April, the last worth 95 euros per share, nearly a 50 percent premium to Akzo's share price in February.

But the U.S. firm chose to walk away in June for a six-month cooldown period, rather than launch a formal bid which would have been seen as hostile, given staunch opposition from Akzo's boards and Dutch politicians.

Akzo instead set new, more ambitious financial targets in April and said it would sell or float the chemicals division.

Former CEO Ton Buechner resigned in July for health reasons and Vanlancker's approval as his replacement is scheduled for a shareholders' meeting on Sept. 8.

The new supervisory board members nominated on Wednesday are Sue Clark and Patrick Thomas. Shareholders will vote on their appointment at next year's general meeting, when Burgmans is set to retire.

Akzo has not yet indicated a replacement for Burgmans. ($1 = 0.8518 euros) (Reporting by Toby Sterling; Editing by Adrian Croft)