BEA has responded to Oracle's offer this week to buy the company for US$17 per share in cash, calling the offer too low.

The company has forwarded a letter to Oracle President Charles Phillips to this effect:

"Our Board of Directors acknowledges your interest in BEA as expressed in your letter of October 9 and is considering it in consultation with our advisors. It is apparent to our Board, however, that BEA is worth substantially more to Oracle, to others and, importantly, to our shareholders than the price indicated in your letter," BEA's William Klein, vice president of planning and development, said in the letter.

"As we have indicated to you previously, we believe that the absence of current financial information in the public markets limits investor visibility into our performance. We expect that this will be corrected in the near future when we become current on our SEC filings, and can communicate more fully with the investment community," said Klein.

BEA has had to delay its financial filings as it reworks previous numbers due to an issue with back-dated stock options, something that affected other technology companies as well.

Klein also asked for clarity about what is meant that Oracle plans to proceed with the process.

"As we have made clear to you in previous discussions, we are very sensitive to the fact that Oracle is a direct competitor of BEA. Therefore, the Board cannot consider any process that is long in duration, open-ended in nature, or would divulge competitively sensitive information which could materially harm our business and our shareholders' interests," Klein said.

The full sale price, based on Oracle's bid, has been valued at about US$6.7 billion by the Wall Street Journal.

BEA also has been under pressure to sell by stockholder Carl Icahn.

The tone of BEA's statement, which calls the offer unsolicited and inadequate, conflicts with the one from Oracle, which said it looked forward to completing a friendly transaction soon. That difference makes the offer reminiscent of the lengthy and acrimonious takeover battle that Oracle waged over PeopleSoft.

"I think they have a chance of resisting," said Laura DiDio, research fellow at Yankee Group, of BEA's prospects. "But ultimately if Oracle raises the stakes enough and swings the board and shareholders in its favor, it'll all be over."

BEA is slightly bigger although not as established as PeopleSoft was, she said. "The PeopleSoft thing was just an abject lesson in what happens in a hostile takeover. For them, resistance did prove futile," she said.

From a business perspective, the acquisition does make sense, she said. BEA has a very strong product portfolio representing a niche that Oracle could use, she said.

BEA is currently the number-two middleware provider by market share, behind IBM, according to a report from Citi. If Oracle's takeover is successful, Oracle will move to second place, followed by Microsoft, Citi said.

Analysts from Citi said the US$17 per share offer is fair and if successful, would be Oracle's second biggest takeover, behind PeopleSoft.

Essentially, the outcome of the bid comes down to a boardroom power play, DiDio said. Oracle, which has been on a "buying binge that shows no signs of abating" over the past few years, has done well convincing takeover targets, she said. "Oracle CEO Larry Ellison has had an impressive track record," DiDio said. "What it comes down to ... is who is the biggest, baddest alpha dog and Larry is quite formidable."