Sources have told the Enquirer that a deal could be announced shortly as part of Linden Homes’ targeted expansion by 2018.

The senior management of Shepherd Group appears to be reviewing its options for the seven main operating businesses.

Latest 2014 accounts for the privately-owned £686m turnover group showed it struggled to perform with profit falling 40% to £11m.

Within this there were strong performances by Portakabin, Shepherd Engineering Services, Homes and FM, but Shepherd Construction and two businesses within Shepherd Group Engineering performed badly.

Wates looked at buying the M&E business and the loss-making building business earlier this year but decided not to move ahead with an offer.

Shepherd Homes, also part of the built environment division, trebled pre-tax profits to £3.5m after nearly doubling completions to 234 homes in 2014 and lifting turnover to £47m.

But the house builder’s land and stock has shrunk from a value of £74m in 2009 to just £27m in 2014, even though the house building industry has seen a strong recovery during the last three years.

Linden Homes delivers just short of 3,000 houses and apartments each year, mainly in the south east and eastern Home Counties.

Last year it made £115m profit from turnover of around £760m and set a target of achieving nearly £1bn turnover in 2018. Land and work in progress was valued at nearly £850m.

Both Shepherd Group and Galliford Try said they refused to comment on speculation or rumour.