Carl Icahn improves Dell counter-offer

Profits have been falling at Dell as customers switch to tablet computers

Billionaire investor Carl Icahn has improved his bid to thwart proposals to take computer maker Dell private.

Mr Icahn is now offering the right to buy more Dell shares at a later date to his previous share buyback plan.

In May, Dell's board recommended that shareholders should accept a $24.4bn (£16bn) offer led by company founder Michael Dell.

But Mr Icahn, who owns almost 9% of Dell, says the offer undervalues the firm.

Shareholders will vote on Michael Dell's offer on 18 July.

Two proposals

Mr Icahn opposed the offer and has instead suggested the company buy back 1.1 billion shares at $14 a piece - but now proposes adding warrants, meaning that investors also get the right to buy one Dell share for $20 over the next seven years.

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

Mr Icahn says his whole proposal is worth $15.50 to $18 a share, while Michael Dell and Silver Lake Partners have offered to buy the entire company for $13.65 per share.

The PC maker hasn't been performing well as consumers shift away from traditional computers. Mr Dell has pledged to shift the business away from PCs into mobile devices and business software.

Under his plan shareholders will be bought out and the company removed from the stock exchange.

He argues that it will be easier to reinvigorate Dell without the pressure of shareholder scrutiny.