Ocado is an unlikely takeover target because its technology and warehouse capabilities do not have enough global appeal, one analyst has suggested following the dampening of reports over a potential acquisition by Morrisons.

The UK online specialist today (10 May) moved to dampen speculation once again that it is in discussions with Morrisons over a potential sale.

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Morrisons, which is in talks with Ocado over a licensing deal, is rumoured to be considering a GBP1bn (US$1.53bn) takeover bid for the Internet retailer. However, Ocado has continued to deny that discussions involve a potential sale.

In a statement today ahead of its AGM, Ocado once again reconfirmed that the arrangements under discussion “do not involve Morrison acquiring either the whole of, or an equity stake in, Ocado”.

“Ocado is in discussions with Wm. Morrison Supermarkets Plc (Morrison) which may lead to an agreement to facilitate Morrison commencing an online business in the UK. Discussions are ongoing, and there can be no certainty that an agreement will be reached. A further announcement on this topic will be made in due course,” it said.

Panmure Gordon analyst Philip Dorgan, however, believes that while an additional revenue stream could emerge from Morrison, that Ocado’s technology and warehouse capabilities do not have “global appeal to other food retailers, nor could they be easily transferred to other retail categories”.

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He added: “The shares have been squeezed up by the hope that strategic value could be about to be unlocked by corporate activity – but the reality is that the strategic value in Ocado is substantially lower than these unrealistic expectations anticipate, because it remains a fundamentally flawed model.”

In its statement today, Ocado also insisted that its partnership with Waitrose would not be affected by any deal with Morrisons.

The retailer said that any such agreement would be “complementary” to Ocado’s existing partnership with Waitrose, which would be “unaffected” by any potential agreement with Morrison

“Product would continue to be sourced with Waitrose, and Ocado customers would continue to buy exclusively from the existing Ocado, Waitrose and branded ranges.”