Michael Dell and Silver Lake described their higher offer as their "best and final" proposal. In a letter to shareholders, Michael Dell wrote that he would be "at peace" if is prevented from buying the company that he founded in college nearly 30 years ago.
Dell spokesman David Frink declined to comment on Wednesday's developments. He said Michael Dell and Silver Lake would review the proposal from the company's special board committee.
Michael Dell's bid has been attacked by Icahn, Southeastern Asset Management and other critics as an attempt to buy one of the world's largest technology companies at a bargain price. Dell Inc.'s stock has fallen by more than 40 percent since Michael Dell returned for a second stint as CEO in early 2007, just as Apple Inc. was getting ready to release the iPhone. That device launched a new era in computing that has seen a growing number of people rely on smartphones and tablets for everyday tasks that used to be done on laptop and desktop machines.
Like most other major PC makers, Dell got caught off guard by the shift and has been scrambling to adapt while its revenue and earnings have been drooping.
Michael Dell believes he can turn around Dell by spending heavily to build better tablets, while also diversifying into more profitable areas of technology, such as business software and data storage. He contends those changes likely will be tumultuous and easier to tolerate if the company no longer has to answer to other shareholders. Dell Inc. would become privately held for the first time in 25 years if Michael Dell's bid prevails.
If Dell Inc. isn't sold, analysts believe the company's stock might retreat to where it stood in the months leading up to the deal with Michael Dell and Silver Lake. The shares sunk to $8.69 in November, its lowest level since the depths of the Great Recession in March 2009.
The shares might be temporarily bolstered while Icahn and Southeastern Asset pursue a complex proposal that would pay $14 per share for nearly two-thirds of Dell's outstanding stock. Warrants also would be issued to allow shareholders to buy more stock in the future. Icahn and Southeastern value their proposal at $15.50 to $18 per share.
In his letter to shareholders last week, Michael Dell said he won't back Icahn's plan. He also has indicated he intends to remain CEO of the company even if his buyout offer fails.
AP Business Writer Tom Murphy contributed to this story.
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