Billionaire investor Carl Icahn is offering shareholders a chance to own a bigger stake in Dell Inc., seeking to force Michael Dell to sweeten his $24.4 billion buyout offer for the personal-computer maker.

Icahn, who holds 8.7 percent of Dell, is adding a warrant to his $14-a-share offer that holders could exchange for additional stock, he said in a letter today. The value to shareholders would be about $15.50 to $18 a share, according to the letter.

Icahn’s latest move is the fourth effort to scuttle the buyout offer of $13.65 a share from Chief Executive Officer Dell and Silver Lake Management LLC. Their proposal won key endorsements this week ahead of a shareholder vote on July 18. Dell is seeking to take the company he founded in 1984 private to turn it into a contender in tablets and cloud computing.

Icahn has said Dell can still compete in the PC market as a public company. His proposal remains risky because the benefit depends on the shares rising to $20, and there’s no guarantee that will happen, said Jeff Fidacaro, an analyst at Monness Crespi Hardt & Co. in New York.

“This deal is not a home run,” said Fidacaro, who has a neutral rating on the shares.

David Frink, a spokesman for Dell, declined to comment.
Dell and Silver Lake’s offer represents a premium of 25 percent over the Round Rock, Texas-based computer maker’s closing share price of $10.88 on Jan. 11, the last trading day before news of a deal surfaced. The shares fell 0.2 percent to $13.32 at 9:35 a.m. in New York.

The warrants act like equity options and are common in takeovers as a way of enhancing value. Icahn is offering one transferable warrant for every four shares bought in the self- tender offer, according to the letter. The warrant would permit the investors to buy Dell shares for $20 for up to seven years, the document shows.
Proxy advisory firm Institutional Shareholder Services Inc. recommended Dell shareholders vote for the $24.4 billion buyout. Glass, Lewis & Co., another shareholder adviser, also backed the founder’s proposal, favored by the special committee of Dell’s board.

“ISS has done a great disservice to stockholders by making a recommendation focused on the criticism” that shareholders can’t immediately reap the benefits of Icahn’s offer, he said in the letter.
“We continue to view our proposal, particularly with the addition of the warrant, as economically better for stockholders.”

Earlier this week Icahn said he was preparing to exercise appraisal rights that are available to shareholders of companies incorporated in Delaware and urged other shareholders to do the same. By seeking an appraisal, investors can seek a higher price for their shares in court.

In March, Icahn offered $15 a share in cash for as much as 58.1 percent of the stock. Then, in May, he teamed up with Southeastern Asset Management Inc. to offer investors $12 a share in cash or additional Dell stock while letting them retain stakes in a public company. Last month, he offered to help finance the last $14-a-share buyback proposal.