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.

UniCredit SpA has hired Deloitte LLP to advise Italy’s second-biggest bank on its takeover bid for Banco BPM SpA, people familiar with the matter said.

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.

The Italian Treasury has denied a report that it is drafting an emergency decree to counter UniCredit’s (OTCPK:UNCFF)(OTCPK:UNCRY) 10B euro ($10.6B) bid for Banco BPM, Reuters reported late Friday. UniCredit made the offer for the smaller rival on Monday,

Italy's UniCredit on Monday launched a surprise 10 billion euro ($11 billion) bid for domestic peer Banco BPM , which CEO Andrea Orcel said would take precedence over any potential move on Germany's Commerzbank .

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.

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.

UniCredit's bid for BPM also throws a spanner in the works for Italy's government, which had advanced plans for a merger of BPM with rival Monte dei Paschi di Siena which it saw as strengthening its banking sector without harming competition.