The 21-year-old Farrelly, who is out of contract, discussed a possible three-year deal with Kendall on Friday evening, just hours after the former Sheffield United manager's return to Goodison Park was confirmed.
Kendall conceded that Farrelly was not the "big-name player" Everton supporters were looking for - Andy Cole and Fabrizio Ravanelli are among those he is keen on - but said he saw him as "a talented player bursting to get his chance".
Everton's bid is believed to fall substantially short of Villa's pounds 1.5m valuation. Brian Little, the Villa manager, has offered Farrelly improved terms in the hope of persuading him to stay. Little has also quoted Sheffield Wednesday a price of pounds 2m for another "fringe" player, the former Leicester striker Julian Joachim.
Everton still have to reach agreement with Sheffield United over compensation for Kendall's return to Goodison. The Blades' chairman, Mike McDonald, said: "I have received the offer of a pittance, an insulting amount. I have written to the Everton chairman and told him that unless his club can come up with an amount acceptable to my club, they can send Kendall back to work for Sheffield United."
Manchester United have joined Newcastle, Liverpool and Tottenham in the pursuit of Crewe's England Under-20 utility player, Danny Murphy. Alex Ferguson sent Kenny Swain, the recently dismissed Grimsby manager, to Malaysia last week to watch Murphy play in the World Youth Championship.
The out-of-contract Manchester City wing-back Nicky Summerbee has been offered a trial by the French club Bordeaux.
The Arsenal vice-chairman, David Dein, has been voted on to the Football Association's executive committee at the FA's summer meeting.
The 1997-98 season starts today in Wales, with Ebbw Vale entertaining Casino Graz in the first round of the Intertoto Cup. The Austrians are coached by Klaus Augenthaler, who won a World Cup winners' medal with West Germany in 1990.