Morgan is the club's third largest shareholder with 5% of the club, wanted to invest £50m to bolster the team and help with plans for constructing a £80m stadium in nearby Stanley Park. He has denied wanting to take over the club.
The other key shareholders are the television company Granada, which owns 9.9% and chairman David Moores, who has a 51% stake.
Morgan stood down as chairman of the North Wales housebuilder two years ago when he sold his 34.5% stake in Redrow. He has built up a fortune of £312m from his building and hotel interests. He has already developed business connections with Liverpool players.
Redrow built homes for Liverpool's star player Michael Owen and his extended family.
He established Redrow as a small civil engineering firm in 1974. It floated on the stock exchange 20 years later. The business now employs 1300 people.
Last year the company had a turnover of £300m and made a pre-tax profit of £56m.