Sports Direct talked about "huge value" combining online functions with Debenhams rather than takeovers as the Mike Ashley-run sports retailer upped its stake in the department store group to 29.7%.
Debenhams' troubles in recent year have seen its market valuation shrink to just over £350m this year, sparking renewed takeover talk in the City.
Sports Direct is seen as leading as a potential suitor, but has its fair share of troubles in recent years to think twice before taking on a troubled high street neighbour.
The increased stake, up from the 23.07% level previously, takes Ashley's ownership to just below the 30% level above which stock exchange rules demand a company must make a takeover offer for the full entity.
Liam Rowley, Sports Direct's head of strategic investments, instead would only speak about a corporate partnership: "We see huge value for both companies in a strategic partnership between Debenhams and Sports Direct.
"There are obvious synergies that can be achieved through the integration of our respective web operations. We also see opportunities to work together internationally.
"Importantly, there is scope for greater collaboration in the UK in order to roll out an elevated offering to consumers. We believe Sports Direct can complement Debenhams very well across the spectrum."
The increased stake in Debenhamscomes hot on the heels of a £100m share buyback plan unveiled by Sports Direct last month, of which one resulting effect will be a relative increase in Ashley's 61% stake as the number of shares
in issue decreases.
At the time, the buyback was set out by Rowley as a demonstration of management's confidence in its "multichannel elevation strategy".
Last year, Ashley and Rowley disposed of the company's stake in JD Sports for a £119m profit after a sizeable share price rise since first acquiring a 12.4% stake in 2008.
For its part, Debenhams followed a January profit warning with a 25% cut to store management roles as chief executive Sergio Bucher accelerates his restructuring plans in the face of a gloomy retail market.
Bucher, who was poached from Amazon just over a year ago, in January warned that profits for 2018 would be lower than hoped due to tough festive trading and expectations of a likely continuation of the competitive and volatile retail market in the second half of the year.
SPD shares were down more than 1% to 359.5p after the news emerged, while DEB was up 4% to 29p.
After more reminders this week of UK high street retail pain with the collapse of Toys 'r' US and Maplin, closures at Prezzo, and another profit warning from Carpetright, analyst Mike van Dulken at Accendo Markets said his namesake's increased stake "adds weight to the assumption that he wants to take full control to help him fulfil his goal of making Sports Direct the 'Selfridges of Sport'".
"After all he could benefit from some great locations and strike a deal on rents, that are clearly too high for DEB."
Van Dulken pointed out that Ashley has already acquired multiple companies and sports brands over the years, including JJB Sports, Lillywhites, Donnay, Firetrap, Kangol, Lonsdale, Slazenger and Agent Provocateur, as well as amassing strategic stakes in a host of listed high street names, namely Blacks, Findel and Goals Soccer, so it cannot be ruled out that he may follow through with a full offer for Debenhams, though the profitable JD sale last year shows it can go both ways.
Debenhams would be Ashley's biggest deal yet, Van Dulken notes. "But he started building his stake in 2014, when shares were significantly higher. Perhaps he's been biding his time waiting patiently for the high street pain to become too much and for his opportunity to pounce on the rest for less."
Whitman Howard analyst Tony Shiret, as well as noting that around half of the seven or eight Sports Direct inserts into Debenhams have closed, felt Ashely was just averaging-down his share purchase price "at what may be the trough in the UK non-food retail cycle" and also "applying some low-cost leverage on the Debs management".
He added: "We would still think it unlikely that it will make a full offer given the property situation at Debs where lease length unexpired is circa 20 years."
Regarding the online comments, Shiret said neither business is very good at either online and international, "and no reason to believe that putting them together will change this albeit could be some synergies re warehouse use".
"SDI also owns just under 30% of Findel another mail order/online retailer so maybe that could come into the equation somewhere."