Perch has only recently returned to first-team duty after being sidelined since last April with a stress fracture in his shin.
The 24-year-old has made four appearances since the turn of the year and has now been the subject of a bid from Forest's Championship rivals.
Davies is not prepared to sell the defender and is unhappy that the details of Newcastle's failed offer have reached the public domain.
"We must be doing something right if other teams in our division want our players," Davies told the club's official website. "But we are looking to build a squad at the City Ground rather than dismantle one and James is not leaving.
"Newcastle's offer for someone we value so highly as a player and an individual was derisory and I'm disappointed it made it into the public domain. That's not our way of doing business."
Perch came through the ranks at the City Ground and has made over 200 appearances for the East Midlands club.
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Source: Team Talk
Source: Team Talk