(Adds comments from Franklin, details on decision)
March 20 (Reuters) - Activist hedge fund Starboard Value LP said on Tuesday four of its nominees to Newell Brands Inc's board withdrew, a day after the consumer products maker handed board seats to billionaire investor Carl Icahn.
Starboard, the $8 billion hedge fund run by Jeffrey Smith, lined up three former Newell board members and others to run for board seats with the aim of pushing Newell management to improve operations and sell assets.
The fund wanted to replace 12 directors, including Chief Executive Officer Michael Polk, arguing that the maker of Sharpie markers, Rubbermaid containers and Elmer's glue had underperformed its peers and mismanaged a 2016 acquisition of Jarden Corp.
Icahn, who bought shares for weeks, received board seats from the company on Monday after having disclosed his 6.86 percent stake on Friday. He has been in touch with the Newell CEO for weeks and said his views on company strategy were aligned with those of Newell.
New Jersey-based Newell has said Starboard has not presented any substantial plans to boost shareholder value. It declined to comment on Tuesday. Starboard also declined to comment.
While the hedge fund could run a proxy fight later, it will give Icahn's directors time to clean up the company, a source familiar with the situation said.
Martin Franklin and Ian Ashken, who co-founded Jarden, and former Jarden executive James Lillie pulled out of Starboard's slate. Domenico De Sole, who had served on the Newell board along with Franklin and Ashken, also cut ties to the hedge fund.
Franklin told Reuters he wanted to change the attitude within the company and he stepped aside because "we were never interested in getting into a battle between two activists."
Franklin said he is now focusing on new opportunities which could include buying some of the assets that Newell wants to sell.
"(Starboard is) putting the fight on hold, waiting to see how the company does with Icahn's people on the board," said Erik Gordon, a professor at the University of Michigan's Ross School of Business.
But investors were not entirely happy with the Icahn settlement, analysts said. Newell stock dropped as much as 7 percent on Monday and traded lower on Tuesday. Some said Starboard, which has a solid track record of making operational improvements in addition to pushing for some asset sales, might have helped push change more quickly at Newell.
Starboard owns about 4.5 percent of Newell. (Reporting by Svea Herbst-Bayliss in Boston and Aishwarya Venugopal in Bengaluru; Editing by Sai Sachin Ravikumar and Cynthia Osterman)