Carl Icahn sweetens Dell takeover offer

Billionaire investor Carl Icahn has sweetened his offer for computer maker Dell in an attempt to thwart a rival bid from the company founder Michael Dell and a hedge fund.

Dell wants to take the company he founded in his college dorm room private in a $24 billion US deal that will see current shareholders received $13.65 a share in a leveraged buyout. Dell has financial backing from hedge fund SilverLake Capital, and the plan turns on being able to make adjustments to the business outside of public scrutiny on stock markets, where profitability rules over all else.

Dell wants to implement drastic changes that will hurt profits in the short term, but he says will be better for the company in the long run.

Icahn, a takeover specialist who owns nine per cent of the company, has accused Dell of trying to buy the company on the cheap, and is spearheading a rival bid that would see the company increase profits and remain publicly traded.

Icahn upped his offer to $14 a share on Friday, and added a new reward for shareholders — for every four shares they tender to him, investors will receive a warrant for another Dell share. The warrant would execute if they stock hits $20. Essentially, that means investors would get to cash out on the company now, but also be able to benefit from any upside down the line.

Dell's shares haven't traded above $20 since September 2008.

In a letter to shareholders, Icahn says the warrant means his offer to shareholders is actually closer to $15.50 to $18 a share.

Shareholders are set to vote on Dell and Silverlight's offer next week, and Icahn timed his offer to encourage them to reject the rival bid.

Founded in 1984, Texas-based Dell that has fallen on hard times as more consumers and companies buy smartphones and tablets instead of laptop and desktop computers.