The battle between founder Michael Dell and activist investor Carl Icahn for the control of Dell Inc. (NASDAQ: DELL) suddenly has moved in Icahn’s favor. For the first time since Michael Dell started the computer company in 1984, his tenure may end abruptly. Icahn will not keep Dell as chief executive officer if he wins the fight, so Michael Dell could be, at age 48, very close to retirement.

A number of news reports say that the Dell board has pushed Michael Dell to increase the value of his contribution to the deal led by him and Silver Lake Partners, and with that new contribution, the value of the price he has offered. The same reports indicate that the private equity firm has no intention of increasing its commitment. Michael Dell, therefore, alone holds the key to the success of his efforts.

Icahn put new pressure on Michael Dell recently when he demonstrated an ability to finance an offer. Icahn has raised the $5.2 billion necessary to bank his bid. Dell’s offer still sits at $13.65 a share, for a total of $24.4 billion.

Until recently, Dell’s own board had recommended his buyout offer over others. At the core of the board’s argument that going private makes sense is that the company’s prospects have worsened and will get worse. Dell’s recent earnings support that. Without any offer, Dell shares would drop back to 52-week lows well below $9.

Complicating matters, Icahn’s offer is very different from Michael Dell’s. According to CNET:

Icahn, who opposes the company’s plan to go private, proposed in a letter to shareholders last month that Dell buy back 1.1 billion shares at $14 per share as an alternative to the plan to take the company private proposed by company founder Michael Dell and Silver Lake Partners. Icahn also announced that he had purchased 72 million Dell shares from proxy fight partner Southeastern Asset Management, making him the second largest shareholder in Dell.

Michael Dell’s next step boils down to the courage of his conviction, and a proof that he has offered full value. If he truly believes the pessimistic opinion about the company issued by his own board, he will not raise his bid and can move off into retirement, and probably life as a philanthropist. If he raises the amount of money he contributes to his offer, he will have admitted that his current offer is too low and that he had no intention to be fair to his own shareholders

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