David Jones' stock rallies on rejected takeover bid

Shares of Australian retailer David Jones significantly surged Thursday after they

said the company had rejected a takeover approach from larger rival Myer last year. On the wake of the news, the stock rose nearly 5 percent in Sydney trading following the announcement.

"The execution and implementation of any such transaction would have substantial commercial, market, business and regulatory risks," the company explained its reasons to turn down the takeover offer.

Australia's second-biggest listed department store operator has unveiled they were approached by Myer in October but clarify they are no longer in talks with their at the time suitor.

In a statement, the retailer added that the offer did "not have sufficient merit for David Jones shareholders".

David Jones received another takeover offer in 2012 from a UK-based private equity fund. David Jones has been struggling with weak spending at its traditional retail stores as more people shop online, getting the industry talking on the Sydney-based to likely become a takeover target anytime soon.