Round Rock, Texas-based Dell agreed in early February to be taken private by a consortium including company founder Michael Dell and Silver Lake Partners for $13.65 per share. But that deal has been criticized by shareholders including Southeastern Asset Management Inc. and others who are concerned the price is too low.

Icahn in a letter to Dell's board released Thursday said that after reviewing the go-private transaction "we believe that it is not in the best interest of Dell shareholders and substantially undervalues the company." He suggested the company instead pay a special dividend of $9 per share, or $15.65 billion, funded by the $7.4 billion in cash identified for the go-private deal, $3 billion from factoring existing commercial and consumer receivables, and $5.25 billion in new debt.

The investor, according to reports, has amassed a 6% stake in Dell. He estimated the special dividend, coupled with retained shareholder ownership of the Dell business, would deliver to shareholders a total value of $22.81 per share, well above the buyout price.

"We believe, as apparently does Michael Dell and his partner Silver Lake, that the future of Dell is bright," Icahn wrote. "We see no reason that the future value of Dell should not accrue to ALL the existing Dell shareholders -- not just Michael Dell."

While Icahn's valuation might be aggressive, the risk arbitrage market has anticipated a buyout price in the $15 per share range.

Dell's special committee in a statement noted that it is currently conducting a go-shop process seeking alternative transactions, saying "we welcome Carl Icahn and all other interested parties to participate in that process." The go-shop is currently scheduled to run until March 22, and according to reports has drawn interest from private equity firms as well as Dell rivals Hewlett-Packard Co. and Lenovo Group Ltd.

Icahn in his letter demanded that the board combine the upcoming shareholder vote on the go-private transaction with the company's annual meeting to elect new directors. If not "we anticipate years of litigation will follow challenging the transaction and the actions of those directors that participated in it."

The special committee, consisting of four independent Dell directors, is being advised by JPMorgan Chase & Co., Evercore Partners Inc. and Debevoise & Plimpton LLP.