Dell Inc. (DELL)’s special committee asked billionaire Carl Icahn for more information about his proposed takeover of the personal-computer maker, made last week as a challenge to founder Michael Dell’s $24.4 billion buyout.

In a letter to Icahn today, the committee said it wants more details about the financing for Icahn’s transaction and asked him to identify the persons he would expect to form the senior management team. It also requested a draft of a“definitive agreement” for the transaction.

Billionaire Carl Icahn’s proposal, which would allow Dell to remain a publicly traded company, includes $12 share that investors would be paid in cash or additional Dell stock, according to filings. Photographer: Scott Eells/Bloomberg 24:21 May 10 (Bloomberg) -- Billionaire investor Carl Icahn talks about his alternative offer for Dell Inc. that could enable investors to keep their stakes in the company. Icahn is seeking to upend a $24.4 billion buyout of Dell by its founder, Michael Dell, and Silver Lake Management LLC. He speaks with Trish Regan on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Icahn and his partner Southeastern Asset Management Inc. plan to borrow money for Dell to offer $12 a share in cash or stock to investors, while also letting them retain stakes in a public company. The payout would dilute existing Dell shares, which Icahn said would have a value of at least $1.65 apiece. In contrast to Michael Dell’s plan to take the company private, Icahn is asking investors to bet on a the future of PC maker beset by rising competition, tumbling demand and mounting debt.

“The most likely scenario at this point is that Michael Dell’s deal goes through,” Lance Vitanza, an analyst at CRT Capital Group LLC, said in an interview today. “There are a lot of people who don’t want the volatility.”

Dell fell less than 1 percent to $13.42 at 9:35 a.m. in New York. The shares have dropped 33 percent this year through May 10, compared with a 15 percent gain for the Standard & Poor’s 500 Index.

Committee’s Questions

“It is not clear to us whether you intend to formulate your transaction as an actual acquisition proposal that the Board could evaluate and potentially endorse or accept or rather to propose it as an alternative that the Board could consider in the event the pending sale to Silver Lake and Michael Dell is not approved,” the special committee said in today’s letter.

Michael Dell and Silver Lake Management LLC are offering to take the company private for $13.65 a share. In addition to working capital, Dell is likely to have “other significant cash needs,” such as approximately $1.7 billion of debt maturities within about 12 months after closing, according to the letter.

Lee Harper, a spokeswoman for Southeastern, and Icahn didn’t immediately return calls seeking comment. Gordon Goldstein, a Silver Lake spokesman, declined to comment on Dell’s letter to the two investors today.

Icahn, who along with Southeastern owns almost 13 percent of the shares, said last week he would look to replace founder and CEO Michael Dell if he prevails. Financing for their proposal will come from existing cash at the PC maker and about $5.2 billion in new debt.

Potential Growth

To prevail, Icahn will have to persuade those investors who want to keep an equity stake in Dell that fresh leadership can do a better job playing catch-up in cloud computing while managing greater debt and combating the biggest sales decline in the history of personal computing.

Investors who don’t want Dell stock face bigger risks under Icahn’s plan. While they would receive $12 a share, there’s no guarantee that they’ll be able to find a buyer willing to pay $1.65 or more for their existing holdings -- a prospect that may make the Silver Lake-Dell bid more alluring.

“We don’t see this as a superior proposal” to the buyout from Silver Lake and Michael Dell, Louis Meyer, a special situations analyst at Oscar Gruss & Son Inc., said of Icahn’s plan. “Most shareholders will be glad to take the LBO.”

Icahn and Southeastern said last week their proposal gives investors a chance to benefit from potential future growth Dell.

PC Slump

“Mathematically, there is no question it is superior,”Icahn said in an interview on Bloomberg Television last week.“You have a choice of getting $12 and still owning Dell, which has great potential.”

Jefferies LLC has committed $1.6 billion to help finance the transaction, Icahn said in the interview.

“If I have to, I will put in $2 billion of my own,” Icahn said.

Still, owning Dell hasn’t been such an attractive option for shareholders in recent years. The shares were trading above $30 in 2007 after Michael Dell returned as CEO following a hiatus, yet they have been sinking amid plummeting demand for PCs and accelerating competition for selling the data-center products and services Dell has opened its coffers to acquire.

Dell’s board is predicting another year of lackluster growth as demand for PC ebbs, underscoring the urgency behind the company’s decision to be taken private, documents filed in March showed.

Sales for the year ending next January will slip to $56.5 billion, and Dell’s PC business will shrink by $10 billion over four years, according to projections in a proxy statement filed with regulators.

To contact the reporters on this story: James Callan in New York at jcallan2@bloomberg.net; Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net; Cecile Daurat at cdaurat@bloomberg.net