Euro Garages’ parent company EG Group has had its takeover offer for Caltex Australia rebuffed, but has been offered the opportunity for further negotiations.

In a statement to the Australian Stock Exchange Caltex said “the EG proposal undervalues the company and does not represent compelling value for Caltex’s shareholders”.

But it added: “However, the Caltex Board considers that it is in the interests of Caltex shareholders to engage further with EG. Accordingly, Caltex has offered to engage further with EG in relation to a potential transaction. There is no certainty that the discussions between Caltex and EG will result in EG improving its proposal or in EG making a binding proposal.”

EG Group had offered A$3.9b (£2bn) in cash for Caltex’s convenience store business and separate shares in a new, listed infrastructure and refinery company made up of Caltex’s remaining assets.

It made the offer after its Canadian rival Alimentation Couche-Tard raised its bid for Caltex to A$8.8bn (£4.5bn).

EG Group already has a presence in Australia having last April completed the A$1.725bn (£910m) acquisition of Woolworth’s petrol business – a network of 540 sites.

Analysts said EG Group might run into issues with the Australian Competition and Consumer Commission, because it is among the top four petrol retailers in the country and would be bidding for a network that accounts for around 16% of petrol retail sales.

The 380 Euro Garages sites in the UK are part of an international portfolio of more than 5,600 EG Group sites in Europe, Australia and the US, where it has just shy of 1,700 sites.

Alimentation Couche-Tard has a worldwide network of more than 14,800 stores including 410 Circle K sites across the island of Ireland.