LG Electronics has denied rumors that Google has purchased a 35 percent stake in the South Korean company. LG's shares soared on Wednesday on speculation that the search giant directly invested in the firm.

"I haven't been heard this news before," Jo Sung-jin, head of home appliances division, told a group of local reporters on the sidelines of his participation in a company event to unveil new products at its Twin Tower, Yeouido, headquarters.

Google's response was typical - the company said it would not comment on rumors or speculation.

LG Electronics has been working with Google on Google's reference Nexus phones. Taking over even a stake of LG Electronics would help the search giant further grow its hardware business in order to diversify its business portfolio.

For LG, "offloading" some of smartphone business could make sense, as the company has been struggling to compete with cheap Chinese rivals.