The board has agreed to a sale of the company to founder Michael Dell and an investment group that values the company at $24.4 billion or $13.65 per share. But that offer opened up a bidding process in which a special board committee is considering offers that might top Dell's proposal.
Two proposals have come forward including a $15 per share offer from Icahn that would end up with the billionaire investor owning a 24.1 percent stake in the company, The New York Times reported.
On Tuesday, the board said Icahn had agreed not to buy more than 10 percent of Dell's shares or strike any formal deals with shareholders that control more than 15 percent of the company.
In return, the company agreed to allow Icahn to lobby his case with Dell shareholders, which would amount to a waiver to corporate laws in Delaware.
Essentially, the deal limits Icahn's ability to tip the balance on the board's decision by simply buying shares or buying enough shares so that he can tie in with other major shareholders to push a deal in his own direction.
A consortium of investors led by Blackstone Group has also put together an offer, proposing a $14.25 per share deal that, like Icahn's offer, would not result in them buying the whole company.