Italy stands by terms imposed on UniCredit-Banco BPM deal

ROME (Reuters) -Italy's Treasury said on Friday it sent a letter to UniCredit confirming the "full legitimacy" and feasibility of the terms it has imposed on the bank's bid for Banco BPM under its so-called golden powers.

In the letter, it said that UniCredit has the possibility of offering proof of why it would not be able to implement the conditions, "in light of the principles of loyal collaboration and good faith".

"We'll see," UniCredit CEO Andrea Orcel told Reuters when asked whether the bank would drop its offer for Banco BPM in light of the letter, speaking on the sidelines of the presentation of the Bank of Italy's annual report.

UniCredit has appealed to an administrative court against the terms set by the government and Orcel has opened to the possibility of letting the offer lapse because it was no longer financially advantageous under the conditions imposed.

A hearing by the court is expected on June 4.

(Reporting by Giuseppe Fonte and Giselda Vagnoni, writing by Enrico Sciacovelli and Alvise Armellini, editing by Giulia Segreti)