Dell Inc. (NASDAQ:DELL)’s proposed leveraged buyout deal just keeps sinking further and further. On Wednesday we reported that activist investor Carl Icahn was stepping into the fray. Today we not only have confirmation of that, but also signs that Icahn is going “all-in” and planning to do whatever it takes to stop that buyout from happening.

carl icahn

The Wall Street Journal reports that Dell Inc. (NASDAQ:DELL) released a letter this morning indicating that Icahn is pushing the company to offer a special $9 per share dividend rather than the $24.4 billion leveraged buyout the company’s special committee has recommended. He wants the PC maker to offer that dividend if the shareholder vote on the leveraged buyout fails. In addition, the letter apparently threatens Dell with “years of litigation” if the company doesn’t add a vote on the deal to its annual shareholder meeting.

Carl Icahn said he would nominate a group of directors who would implement his proposal for a dividend and leveraged recapitalization so that shareholders could choose between his proposal and the buyout being led by founder Michael Dell.

He also gave details on how the special dividend could be funded. He said $4.26 per share could come from the company’s available cash, while $1.73 per share could come from factoring the company’s existing receivables. The remaining $4.26 per share would be in new debt.

According to Carl Icahn, if the directors he nominates are elected, his own firm Icahn Enterprises would offer a $2 billion bridge loan, while he would also provide a personal $3.25 billion loan to the company if necessary.

Icahn said his calculations indicate that the special dividend he is pushing for is a better deal than the current offer to take the company private. He said a “stub” value of $13.81 per share, plus the special dividend, is a 67 percent premium to the current offer, which is $13.65 per share.

Dell Inc. (NASDAQ:DELL)’s response was that it’s conducing a go-shop process and that Evercore, its financial advisor, is soliciting alternative proposal. The go-shop period ends March 22. In addition, the company added that it would appreciate Icahn’s assistance in locating an alternative proposal.

Of course Carl Icahn isn’t alone in his push to avoid the proposed leveraged buyout deal. He’s siding with Southeastern Asset Management, although he’s going further than the firm with his demands.