Dell special committee urges Michael Dell to raise $24.4bn buyout offer after Icahn bid turns heads

$3bn Icahn proposal amounts to 66 per cent of debt financing

Dell's special committee has advised company founder, and prospective new owner, Michael Dell, to raise his acquisition offer following an improved counter-offer by rival Carl Icahn and his associate investors.

The independent committee, which exists purely to gauge best options for shareholders in Dell, reacted to a declaration yesterday from Icahn that he now has $3.42bn of capital - which represents 66 per cent of what is needed to buy out Dell's debts - to back his own bid for the company.

Icahn - who is joined by Southeastern Asset Management - has put on the table an offer that means $14 a share paid to current shareholders, while Michael Dell and Silver Lake's buyout bid offers only $13.65 per share, which Icahn has said undervalues the company.

While Icahn's bid now seems solid, the US Securities and Exchange Commission filing says it is also dependent on 12 specific nominees being placed on the board. Proposed in May, these people are still not appointed.

Icahn's bid will also only stand a chance if shareholders reject Michael Dell and Silver Lake's offer in the first place. The shareholder meeting will take place on 18 July.

A shareholder described the whole arrangement as "a game of chicken", adding that Icahn is "going for the bump", describing an ongoing rumour that Icahn could yet raise his offer price - possibly dramatically - in order to give Michael Dell less chance to manoeuvre before the decision date.