Icahn and Southeastern would both opt out of the cash dividend and instead take the $12 payment in Dell shares priced at $1.65.
Were Icahn to press his proposal, the deal would look like a leveraged recapitalization of Dell for shareholders using $5.2 billion in debt, Dell's cash stockpile and other unutilized assets.
Earlier in May, Icahn proposed himself and five other nominees to Dell's board of directors, while Southeastern proposed six nominees.
Icahn also promised significant litigation if his proposal were not taken up by Dell's board of directors.Given Friday's announcement in support of Silver Lake and Michael Dell's offer, Icahn's best next hope for the PC-maker may come from a hostile takeover campaign. Dell shares were unchanged in pre-market trading at $13.27 a share, slightly below Silver Lake's offer. -- Written by Antoine Gara in New York Follow @AntoineGara