Entrepreneur Guy Hands is understood to be preparing to put in a bid for Fairclough Homes, the housebuilder put up for sale for £250m by its US parent Centex. Hands is chief executive of private equity company Terra Firma.

Hands, who walked away from buying the Millennium Dome and owns the Odeon and UCI cinema chain, demonstrated his interest in the housing market when he looked at the Berkeley Group last year. Terra Firma also bought the £5bn residential portfolio of German energy company Eon, in May. The portfolio consisted of 150,000 flats and houses across Germany.

However, City sources this week said Persimmon Homes was also taking a close look at Fairclough, in what was most likely to be a land deal.

The market has been waiting with bated breath for Persimmon, the largest UK housebuilder with a market capitalisation of £2.3bn, to make the acquisition that would take it closer to the FTSE 100.

Fellow housebuilder Redrow is also thought to be interested in Fairclough.

Fairclough has its headquarters in Guildford, Surrey, but operates in the Midlands, the North-west and Yorkshire, as well as the South-east.

Centex reported that Fairclough had completed 1563 units and reported £36.3m of earnings on sales of £275m in 2004. Centex is thought to be leaving the UK market because it failed to forge a strong relationship with Fairclough. It has appointed Merrill Lynch to advise on the disposal.

Analysts at ABN Amro said that when Centex first bought Fairclough, “it was part of a European push and intended to extend the business beyond simply selling the new home, into home security,” but that did not happened.

All parties declined to comment.