Direct Line’s shares surged as investor’s hoped the rejection might pave the way for a second takeover bid from the U.K.’s largest insurance company

Direct Line Insurance Group Plc shares surged as much as 39% after the insurer rejected a £3.3 billion ($4.2 billion) takeover bid from Aviva Plc, the second suitor it’s rebuffed this year.

Direct Line’s new boss, Adam Winslow, is a former executive at Aviva and the two insurers have large shareholders in common such as Schroders and Redwheel.

(Reuters) -Shares in UK's Direct Line Insurance soared over 36% in early trade on Thursday after it rejected a 3.28 billion pound ($4.16 billion) takeover offer from bigger rival Aviva, saying it "substantially undervalued" the company.