The Italian lender rejected the offer from its larger rival, saying it undervalues the bank and creates uncertainty.

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.

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.