UPDATE 4-Mentor Graphics concedes defeat to Icahn Nominees

* Mentor Graphics says prelim results indicate Icahn nominees have won

* Mentor says will cooperate with new directors

* Icahn says it appears 3 of his nominees elected to board

* Says nominees won by a "meaningfully high margin"

* Shares up 7 pct to near seven-week high (Adds Mentor Graphics' statement in para 1,2)

By Nadia Damouni and Himank Sharma

NEW YORK/BANGALORE, May 12 (Reuters) - Mentor Graphics said preliminary results of its shareholder vote indicated that Carl Icahn's three nominees will join the company's board, ending a long-drawn proxy battle after the company rejected the billionaire investor's takeover bid.

"Our board and the management team will do our utmost to work cooperatively with the new directors to continue to create value for Mentor Graphics shareholders," the company said in a statement.

Icahn, who holds a nearly 15 percent stake in Mentor, offered $1.73 billion to buy the company in February, but the bid was rejected. He had nominated three individuals to replace directors on the eight-member board. [ID:nL3E7DM1MC]

Icahn's three nominees - Jose Maria Alapont and Gary Meyers and David Schechter -- would replace Marsha Congdon, Fontaine Richardson and Jim Fiebiger on the company's eight member board.

Alapont is chief executive of Icahn-controlled auto parts supplier Federal-Mogul Corp . Meyers is a director at semiconductor company Exar Corp . David Schechter, is a portfolio manager with Icahn Capital.

Billionaire investor Carl Icahn had earlier said preliminary results indicated that all his nominees have won by a meaningfully high margin.

Mentor shares rose 7 percent to $15.33 in afternoon trading following Icahn's announcement.

"While official results may be several days away, it appears that our three nominees have won election as directors of Mentor Graphics," Icahn said in a statement.

Earlier on Thursday, two Mentor Graphics shareholders -- who together hold more than 8 percent of the company's outstanding shares -- told Reuters that two of Icahn's nominees were likely to win in the voting.

Mentor executives have been in New York over the last three weeks aggressively reaching out to investors, one of the top shareholders said.

In a letter to Mentor in March, other dissident shareholder Casablanca Capital said it would support Icahn's slate of nominees to the board.

Mentor, which has been fighting separate proxy battles with Icahn and Casablanca since earlier this year, said it won backing for all its director nominees from proxy advisory firm Glass Lewis & Co.

The company said, however, that Institutional Shareholder Services (ISS), a second proxy advisory firm, recommended two of three Icahn nominees to the board.

After Icahn's takeover bid, the company in a regulatory filing asked shareholders to vote against Icahn's proposals that are not recommended by the board. [ID:nL3E7EF1UY]

The company's annual meeting was held at its Wilsonville, Oregon, headquarters. (Reporting by Nadia Damouni; Editing by Gunna Dickson and Sriraj Kalluvila, Prem Udayabhanu)