The right winger was given non-contract terms by Alan Buckley before he left the Spotland outfit.
Donovan trained with Town after he agreed a contract termination with Barnsley but it was stated at the time by the player he was training just to get fit.
Groves is a known fan of Donovan and it is thought he would love to add the 1997/98 hero to his current squad.
Current finances mean that won't happen though, although Groves didn't rule out a future move.
"We've used up all our budget so, at this moment in time, there is nothing happening with that one," Groves said.