Michael Dell has been advised to raise his $24.4 billion offer to take his company private.
The move follows billionaire investor Carl Icahn revealing he had committed more than $3 billion to back an alternative proposal.
The PC maker's special committee told Dell's founder and chief executive that he should raise his offer if he wants it to succeed.
The special committee will have the power of accepting either Dell's offer to buy his own company and take it private, or Icahn's. Until now it has backed Dell.
The committee is expected to publish its view on whether Michael Dell's offer, which is backed by equity financing from buyout firm Silver Lake, is in the interest of Dell's shareholders as early as next week. An 18 July shareholder vote on Dell's plan to go private will follow.
According to Bloomberg, despite being told to raise his offer Michael Dell is non-committal.
Icahn thinks that Dell's offer substantially undervalues the company.
The $5.2 billion financing deal put together by Icahn was shown to a mix of US and foreign banks, asset managers, hedge funds and collateralised loan obligation managers.
Icahn's proposed tender offer will be financed with $7.5 billion of cash on the balance sheet, the $5.2 billion credit and $2.9 billion from the "sale of receivables".