Troubled housebuilder Redrow is said to be looking for a buyer as it tries to fend off attempts by its founder, Wolves owner Steve Morgan, to rejoin the board as chairman.

According to reports today, Redrow has given its financial adviser Merrill Lynch the job of gauging takeover interest in the group amid a plan by Mr Morgan to install himself as executive chairman after upping his stake in the builder.

Mr Morgan, who started Redrow in 1974, increased his interests in the firm to 29.9 per cent last week – just below the 30 per cent trigger for a full takeover offer – and said he wanted a greater say in running the firm.

The 55-year-old founded Redrow in 1974 with a £5,000 loan from his father. He floated it on the stock market before stepping down from the board in 2000, although he retained a substantial holding in the business. That and his subsequent business ventures have helped build a personal fortune estimated at £400 million.

In August 2007 he bought Wolves from Sir Jack Hayward for a nominal £10 and a promise to invest £30 million in the team.

Redrow, which announced a £46.2 million half-year loss in February, revealed last week Mr Morgan had approached the company with a proposal that he take on an executive role which “would result in a fundamental change in the composition of the board”.

It is understood Mr Morgan wants to become executive chairman in a move that would spark a full-scale boardroom shake-up.

Other reports at the weekend suggested he had the support of Redrow’s second biggest shareholder, the hedge fund Toscafund Asset Management. Current chairman Alan Bowkett has consulted leading Redrow shareholders about Mr Morgan’s plans and the board is in talks with him to clarify corporate governance issues.

Shares in Redrow jumped more than 13 per cent at one stage after news of his intentions emerged last week, with markets taking it as a sign of value in the beleaguered sector after a punishing 18 months.

Redrow has suffered badly from the house market downturn, with its stock price plunging from a peak of more than £7 per share two years ago to just 153p today.

As well as revealing half year losses Redrow has also axed half its staff in the past year.

Mr Morgan has not spoken so far about his approach to the building firm or his plans for its future. Redrow itself declined to comment further today.