"I had a chat with James and we put our cards on the table," Redknapp told the clubs official website.
"I asked him what he wanted to do and he said that he likes it here, but if the opportunity comes for him to move then he would take it.
"I can understand that and from my point of view if I get enough money for him, it will give me the chance to bring in three or four new faces.
"Beatts has been good as gold and he is a good lad to have around, but I would think he may well have played his last game in a Southampton shirt.
"In an ideal world I would like to keep him because he is a top goalscorer and we need players like him, but if it means I can strengthen in several positions then that is something I may have to do.
"We have had had interest from three clubs who have offered decent money and that was one of the reasons I left him out.
"It was a case of making sure he was not affected by the talk and also protecting him from getting injured.
"If it is going to happen - and it looks as though it probably will - then I would probably look to do it sooner rather than later.
"I want to do business real quick - that is the key for me. Time is running out and we need to get three or four players in soon."