Frustrated with Gateway Inc.'s lackluster earnings, eMachines founder Lap Shun (John) Hui has issued a challenge to Gateway to sell him its computer retail operation for $450 million.

In correspondence released Tuesday, Hui said he would also be willing to acquire the entire company and separate its retail unit from Gateway's professional and direct businesses. Hui sold eMachines to Gateway for $290 million in cash and stock in 2004.

Gateway management responded Wednesday by saying its financial and legal advisors will evaluate Hui's proposal.

"I am very disappointed that Gateway has chosen not to constructively engage in discussions with me," Hui stated in a letter dated Monday to Gateway chairman Richard Snyder.

He added: "The landscape of the PC business has continued to evolve rapidly and Gateway has not reacted. Gateway's stock price has continued to decline and the failure to name a replacement CEO for over six months has left Gateway in a position where it is unable to clearly and credibly articulate its strategic direction in the market."

Hui said Gateway's professional and direct businesses have been a drag on the company's retail operation.

Hui noted that he had broached the idea of acquiring Gateway's retail operation with Gateway's management on August 3 when he said he could make his bid public if the company didn't wish to discuss his proposal further.