UBI Banca has told Italy's market regulator Consob that a proposed takeover offer by bigger rival Intesa Sanpaolo should no longer be considered as valid, the country's fifth-largest bank said on Tuesday.

UBI said it believed the COVID-19 outbreak constituted a "material adverse change" (MAC) which, under contractual clauses customarily included in acquisition deals, gives the buyer the right to walk away from the purchase before closing.

"UBI felt it was its duty to bring to Consob's attention some elements in relation to the effectiveness of the MAC clause and the COVID-19 pandemic as well as the irrevocable nature of the offer," UBI said in a statement.

"UBI Banca has highlighted the reasons why it believes that, since the MAC clause applies, the exchange offer is no longer valid ... because the offer must be irrevocable," it added.

Consob had no comment.

Shortly before the novel coronavirus outbreak in Italy, Intesa unveiled a surprise all-paper offer for UBI, offering 1.7 new shares for each UBI share tendered by investors.

The offer, which would create the euro zone's seventh-largest banking group, has met resistance from some of UBI's shareholders and UBI has said its board would assess alternative options.

Intesa plans to launch the offer at the end of June after gaining regulatory clearance from antitrust and market regulators.

It has repeatedly said it will go ahead with the exchange offer even if take-up is just 50% of UBI's capital plus one share, well below a take-up threshold of 66% it had initially targeted.

(Reporting by Andrea Mandala and Valentina Za; editing by James Mackenzie and Emelia Sithole-Matarise)