BEA Systems has said it is prepared to be acquired by rival Oracle, but that it needs more money.

Oracle said yesterday that BEA's board of directors had officially turned down its offer to buy the company after passing Sunday's deadline.

But several hours later, BEA fired back with a letter from vice president William Klein to Oracle president Charles Phillips. In the letter, Klein said Oracle's offer is too low, but made it clear BEA is not against being acquired for the right price.

"BEA is worth significantly more than $17 to Oracle, to others, and most importantly to BEA shareholders," the letter said. "BEA's Board has not indicated that it would be opposed to a transaction that appropriately reflects BEA's value, reached through a reasonable process."

An Oracle spokesperson did not immediately return a request for comment.

Oracle's existing bid totals about $6.7 billion, and the enterprise software giant said yesterday it "has no interest in a long, drawn-out process to acquire BEA."

So far, the BEA-Oracle talks have sparked duelling public statements, missed meetings and shareholder angst, but haven't been nearly as heated as other merger battles, such as Oracle's acquisition of PeopleSoft.

Still, it remains unclear whether Oracle will increase its offer for BEA, which it calls "generous."

"Oracle typically has some [pricing] ratios it uses in its acquisition strategy," Forrester analyst Ray Wang said. "If they really want to dominate the middleware space, this is an acquisition they'd want to make."

If it succeeds in buying BEA, Oracle would swallow up a major competitor in the application server space, a scenario that has had some observers wondering about the fate of BEA's technologies.

Oracle's move to purchase BEA is only the latest in a string of high-profile buys in 2007. The company has forked over billions for a wide array of enterprise software companies, including business process management vendor Hyperion Solutions and application data grid player Tangosol.

BEA has some products that would fill holes in Oracle's portfolio. But the two companies compete closely on other fronts, such as web server and ESB (enterprise service bus) offerings.

"Those are areas with lots of overlap," Wang said. "But there's a lot of good technologies on both sides."