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Three companies including Gerald Ronson's Heron International are circling Gleeson's £160m-turnover housing and regeneration division.

It is understood that Gerald Ronson's Heron International, and housebuilder Gladedale are in talks with Gleeson about buying the business. Scottish contractor and housebuilder Miller Group is also understood to be interested.

If a sale was to go ahead it would reduce Gleeson to a small property development and investment business.

ºÚ¶´ÉçÇø revealed three weeks ago that Gleeson was in exclusive talks with Morgan Sindall to sell its civil engineering business. An announcement confirming that Morgan Sindall is to buy part of that business is expected ahead of Gleeson's interim results announcement on 31 March.

The sale of the housebuilding division was described by a source close to Gleeson as "extremely likely". It is unclear whether Gleeson would continue to operate the property development and investment business, sell it on, or focus on a new area. Gleeson was unavailable to comment.

Gleeson Homes focuses on residential schemes in the North and South, as well as low-cost housing and urban regeneration schemes, particularly in the North and the Midlands.

In the year to 30 June 2005, Gleeson Homes increased operating profit 39% to £17m on a £160m turnover, up 43%. It sells houses from £80,000 to £300,000, and 85% are built on brownfield sites.

It has long-term involvement in regeneration schemes at Beswick and Grove Village in Manchester, at Norfolk Park in Sheffield, and in central Liverpool.

It was also part of a consortium that was appointed preferred developer for a 1500-unit scheme at North Huyton in Merseyside, and was selected by English Partnerships to join the National Developer Panel with the aim of developing the NHS' surplus land portfolio.

Heron, Gladedale and Miller Group have all shown their appetite for acquisitions in the housing sector. In March last year housing regeneration specialist Crest Nicholson rejected a £480m approach from its biggest shareholder, Heron International.

The City expected Heron to make another approach for Crest once the six-month exclusion period expired in November last year but it has yet to do so. Heron declined to comment on Gleeson.

Gladedale approached the former quoted housebuilder Countryside, also a regeneration specialist, about a potential offer, but the board headed by chairman Alan Cherry rejected the approach and carried out a management buyout at the beginning of 2005.

Gladedale also approached Fairclough last year, but lost out to the Miller Group.

Keith Miller, chief executive of Miller, would not comment on any specific takeover target but when asked if the Fairclough takeover had satisfied his appetite for acquisition he said: "Absolutely not."

Speaking after Miller Group's annual results announcement Miller said: "We are very happy with the integration of Fairclough and we're ready to do more at whatever scale is available. We believe this industry is going to further consolidate and we have the funds and the team capable of doing it. We are looking at the whole sector and are pretty clued up on what might become available."

Gleeson has been wearing a "for-sale" sign since it made a £44m loss on its building division last year. The firm later sold that subsidiary to its management team, and rejected a £197m takeover approach for the whole business from investment company Castle Acquisitions.

Castle said at the time that it may still make an offer and said this week in a statement that "a further announcement will be made on this matter as and when appropriate".