The proposal from activist investor Icahn comes two days before a $6.7 billion offer from Oracle Corporation was set to lapse.

Oracle, the world''s third-largest software maker with a market value of about $100 billion, has given BAE time till Sunday evening to accept its $6.7 billion ($17-per-share) bid.

Icahn has set an asking price of $8.2 billion, or $21 a share, and accused BEA management of attempting to derail a sale of the software company after it rebuffed Oracle''s offer. (See: No white knight in sight to rescue BEA from Oracle''s unsolicited interest )

"If a topping bid arises, then all the better," Icahn said in a letter to BEA''s board, adding, "But if no topping bid arises it should be up to the BEA shareholders to decide whether to take the Oracle bid or remain as an independent company."

BEA shares, meanwhile, fell 6 per cent to $16.50 yesterday to trade below Oracle''s October 12 bid for the first time, as the deadline for the offer loomed with no signs of an agreement.

In his letter, Icahn also demanded that BEA not take any action that would dilute shareholder voting power by issuing stock, entrench management or derail a potential sale. He said he was starting a lawsuit in Delaware to demand BEA hold a shareholder meeting before undertaking any actions.

He said, BEA''s press release regarding Oracle''s offer indicated that the board intends to find ways to derail a sale and maintain control of the company. "In particular I view your public declaration of a $21 per share ''take it or leave it'' price as a management entrenchment tactic, not a negotiating technique."

Oracle said the price asked by BEA is "impossibly high," as it represented an 80 per cent premium to BEA shares before activist shareholders started pushing for a sale, and was nearly 11 times BEA''s revenue from software maintenance services in the last 12 months.