BEA Systems lost as much as 6 percent on Friday to trade below Oracle'sbid for the first time since it was made, as the deadline for the offer loomed with no signs of an agreement.
Oracle, the world's third-largest software maker with a market value of around $100 billion, on Thursday rejected BEA's asking price of $21 a share, or a total of $8.2 billion, saying that it was "impossibly high."
Oracle President Charles Phillips said the company was standing by its $17-per-share bid, which will expire at 5 pm California time on Sunday, "at which time Oracle will move on and evaluate other potential acquisitions."
BEA responded on Friday by saying Oracle's price was still not acceptable to the company, which makes software called middleware, which connects computer systems.
Shares of BEA recouped some of their earlier losses but were still down more than 4 percent in Nasdaq trading. Oracle shares were slightly higher.
"As fiduciaries, our Board cannot endorse a proposal that it has concluded significantly undervalues BEA," William Klein, BEA's vice president of business planning and development, said in a letter to Phillips. "We therefore assume that your proposal will expire on October 28."
Oracle had said in a letter to BEA's board on Thursday that $21 per share represented an 80 percent premium to BEA shares before activist shareholders started pushing for a company sale, and was nearly 11 times BEA's revenue from software maintenance services in the last 12 months.
"Nobody would seriously consider paying that kind of multiple for a software company with shrinking new license sales," Phillips said in the letter.
Talk of a buyout for BEA began in August when activist investor Carl Icahn said he had begun acquiring shares in the business software maker and called on its board to put the company up for sale.
Shares of BEA had risen to as high as $18.94 after Oracle made its bid, sparking investor hopes that other companies may put in an offer for the company.
Besides Oracle, other companies that analysts have been touted as possible buyers of BEA include International Business Machines, Hewlett-Packardand SAP.
SAP has said it was not interested in buying BEA, while Hewlett-Packard and IBM have declined to comment.