Bayliss wants $2m to race Rossi
Rossi is reportedly keen on the challenge but Bayliss has been firm in his decision to walk away from motorcycle racing completely.
Bayliss retired at the end of this season after clinching his third Superbike world crown and is eyeing a possible switch to V8 Supercars.
But he has left a small window open to the Rossi suggestion and believes the Italian Yamaha star could easily be competitive on the different machine.
"I spoke with Valentino and he told me that he wants to race me really badly,'' Bayliss told motorcyclenews.com. "Yamaha have got a strong bike so it would be no problem at all for him to get up to speed.
"It wouldn't be so hard for him to be competitive on a Superbike. Valentino Rossi is Valentino Rossi.
"(But) I'm feeling happy that the last time I rode I was world champion plus I won both races and beat all the other guys out there.
"For me to do it I'd need something like Stg1 million and that's not going to happen.''
Rossi, who this year regained his world MotoGP title from Australian Casey Stoner, has described Superbikes as the most entertaining form of motorcycle racing.
He has since reportedly been keen to arrange a head-to-head duel with the Australian.
The race was tipped to take place during the second round of the World Superbike series in Qatar on March 14. The MotoGP season does not start until April 12 in Qatar.
But Fiat Yamaha has played down reports of the one-off clash.
"Valentino has given a couple of interviews since (the final race in) Valencia where he has spoken of his passion for World Superbikes and how much he enjoys that series,'' a spokesperson said.
"There is no doubt it would be a very exciting and epic battle but there is no plan by Yamaha to let Valentino race in World Superbikes.''