The bank blasted what it sees as a weak premium. Its CEO warned a deal would cost BPM 6,000 jobs. And Italian officials expressed concern that a UniCredit tie-up would stall efforts to grow BPM.

Italian lender Banco BPM on Tuesday said the unexpected takeover offer by domestic rival UniCredit does not reflect its profitability and could reduce its legal autonomy. UniCredit offered to snap up Banco BPM for roughly $10.

The smaller Italian lender had previously flagged "serious concerns" about the "employment and social impacts" of a potential merger.

UniCredit on Monday launched a €10.1bn takeover bid for BPM, Italy’s third-largest bank, surprising the market and the country’s political establishment.

Banco BPM SpA said the takeover bid it has received from UniCredit SpA wasn’t agreed in advance and isn’t in line with its performance.

Banco BPM SpA rebuffed an unsolicited approach by UniCredit SpA, saying its takeover offer wasn’t agreed in advance, is too low and would likely hurt jobs and competition in Italy.Most Read from BloombergNew York City’s ‘Living Breakwaters’ Brace for Stormier SeasIn Kansas City,

Italy reserves the right to use its golden power legislation aimed at shielding strategic assets in regards to UniCredit's plans to take over Banco BPM , Economy Minister Giancarlo Giorgetti said.

UniCredit SpA informed top officials in the Italian government and Banco BPM SpA Chairman about its intention to make a takeover bid for its smaller rival before announcing the move on Monday, people with knowledge of the matter said.

The bid from the larger Italian lender "does not reflect in any way the profitability and further potential to create value for Banco BPM shareholders", it said in a statement.

Italy's Banco BPM, the target of an unsolicited all-share offer announced by UniCredit, should remain an independent bank, its CEO said in a letter to staff on Wednesday, warning of big job cuts if the deal went through.