In a letter to the BEA board dated Thursday, October 25, Oracle rejected a $21 per share counter-proposal by BEA Systems, calling it “impossibly high” and reiterating its $17 per share offer.

The letter from Oracle President Charles Phillips noted that BEA’s proposed price amounts to nearly 11 times BEA’s maintenance revenue for the trailing 12 months. The bid by Redwood Shores, California-based Oracle is worth about $6.7 billion, while BEA’s proposal would elevate the price to about $8.3 billion.

“Nobody would seriously consider paying that kind of multiple   for a software company with shrinking new license sales,” Mr. Phillips said.    Furthermore, no other company has come forward to bid for BEA.  Our  proposal at $17 per share is the only offer.  Apparently no other companies think that BEA is worth $17 per share, let alone $21 per share.”

In a research note, Bart Narter, senior analyst at Celent, a Boston-based research firm, said BEA, a maker of infrastructure software,  is an imperfect fit for potential rival suitors such as IBM and Hewlett-Packard.

“BEA competes with more than complements IBM,” he said, adding that “while HP may kick the tires, Oracle ultimately seems to be the best match.”

Financier Carl Icahn, the largest BEA shareholder, has pushed management to find a buyer, but has called the initial offer by Oracle inadequate.

In his letter, Mr. Phillips repeated Oracle’s threat to drop its acquisition campaign:

“If the BEA board continues to refuse to execute an acquisition agreement at $17 per share, our proposal will expire at 5 p.m., PDT, on Sunday, October 28, 2007, at which time Oracle will move on and evaluate other potential acquisitions.”