Icahn, who says he has a "significant" position in MGM, is pushing an alternative proposal to merge the heavily indebted film studio with Lions Gate Entertainment, in which he also has a large stake.
MGM, home to the James Bond and Pink Panther films, has struggled with heavy debt after a leveraged buyout of the studio in 2005. The studio has struggled to come up with a plan to fix its finances and settled earlier this month on a proposal that includes filing for bankruptcy to shed debt.
Icahn says that the deal joining MGM with Lions Gate, known for television hit "Mad Men," would increase values for MGM and Lions Gate stakeholders. He describes the Spyglass plan as a "recipe for disaster" that is being pushed through too quickly without enough disclosure.
Icahn also said that he has learned of another offer for MGM that neither the company nor its creditors have made public.
A spokeswoman for MGM was not immediately available for comment.
Icahn said his offer is good for holders of MGM's senior secured loans because it offers the option to sell their loans to him at 45 cents on the dollar, about where they were quoted on Wednesday, according to Reuters data.
He said the options give noteholders the right to lock in the 45 cents price because they can sell the loans from October 29 up until two weeks after MGM exits bankruptcy, or one year, whichever comes first. He said he would buy loans worth up to $963 million in principal amount.
In return, debtholders would promise to vote against the company's proposed plan to swap more than $4 billion in debt for most of the equity in the company through a pre-packaged bankruptcy.
Spyglass Entertainment, a production company that has financed such films as "The Six sense," would contribute some assets to MGM and take over managing it in return for a small equity stake. MGM's senior lenders would end up owning most of the company.
Senior debtholders are due to vote by October 29 on the pre-packaged bankruptcy deal, which would enable the company to get through bankruptcy more quickly.
Icahn said his offer is contingent on the Spyglass plan being rejected.
(Additional reporting by Tom Hals, editing by Maureen Bavdek, Dave Zimmerman)
