Pepe Related LinksCompetitionsPremier LeaguePrimera Division TeamsManchester CityReal Madrid PlayersPepe Real Madrid centre-back Pepe has received a lucrative offer from Manchester City , according to Spanish sources.
Pepe’s contract at Real expires at the end of next season, and the two sides are yet to reach an agreement over an extension.
And according to the Spanish AS newspaper, Manchester City are waiting in the wings with an £80,000-a-week deal for the 27-year-old, while Real are offering him about £58,000.
Chelsea and Manchester United have also been linked with the Portuguese defender.
Manchester City set to complete record breaking signing of Wolfsburg's Edin Dzeko, according to reports
Edin Dzeko is set to break the Bundesliga transfer record by joining Manchester City from Wolfsburg for a fee in the region of £34.1 million (40 million euros), according to reports in Germany.
The Bosnian striker has made no secret of his desire to leave the German side for a bigger club and, while his dream has always been to join AC Milan, the fact the Italians have just signed Antonio Cassano from Sampdoria reduces the chances of that move coming off.
However, Manchester City have the ambition to become one of Europe's top clubs and they also have the financial backing, and a transfer of Dzeko next month is looking more likely.
Coach Roberto Mancini has also confirmed that he is a fan of the 24-year-old.
The Wolfsburger Allgemeine newspaper quotes Mancini saying: "We have the chance to win the league this year and the decisive factor could be Edin Dzeko.
"This player can decide titles and that is why we want him."
Wolfsburg's managing director Dieter Hoeness declared last week that his club is preparing to make major changes to the playing personnel after a disappointing first half of the season.
Selling a player of Dzeko's talent may not be his preference, but the player's malaise at the 2009 Bundesliga champions, who currently seem unlikely to provide him with the chance to play in the Champions League next season, may be one of the reasons the team has not been functioning since Steve McClaren took over as coach in the summer.
A fee of 40 million euros (£34.1 million), which the Wolfsburger Allgemeine reports would be made up of an initial fee of 30 million euros (£25.6m) with five million (£4.2m) to follow in the case of City qualifying for the Champions League, while five million euros would go on signing-on and agent fees, would break the Bundesliga's transfer record.
Bayern Munich currently hold that with their 30 million euros outlay on Mario Gomez from Stuttgart in 2009.
Diego's sale from Werder Bremen to Juventus last year is the most expensive foreign sale to date at 27 million euros, while he returned to the Bundesliga last summer, joining Wolfsburg for a cut-price fee of 15.5 million.
And the Wolves are set to make a huge profit on a player they signed for just four million from FK Teplice in 2007.
He won the Bundesliga golden boot award last season after coming runner-up to his team-mate Grafite in Wolfsburg's championship-winning year.
He has already found the back of the net 10 times this season, taking his overall tally to 66 in 111 games for the Wolves.
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WAG OF THE DAY

OTHER BOLLOX
Celtic manager Neil Lennon is eager to bring out-of-favour Aston Villa defender Richard Dunne and midfielder Stephen Ireland to Parkhead on loan. Daily Mirror
Sir Alex Ferguson is set to reinforce his Manchester United midfield with a £12m New Year move for Real Madrid's Lassana Diarra. the Sun
United are also preparing a summer move for CSKA Moscow keeper Igor Akinfeev, who Ferguson sees as a long-term replacement for current number one Edwin van der Sar. caughtoffside.com
Fulham hope to make Chris Samba their first signing of the January transfer window but the Blackburn defender wants assurances over Mark Hughes's future first. Daily Mail
However, the Cottagers may face competition from Arsenal, who are keen on the £8m-rated centre-back. caughtoffside.com
The Gunners are also reportedly back in the hunt for Werder Bremen centre-back Per Mertesacker. imscouting.com
Liverpool have rejected a loan offer from Birmingham City for 24-year-old winger Ryan Babel, who has also attracted interest from West Ham and Tottenham Hotspur. Football365
Juventus are preparing a £27m-offer for Arsenal striker Robin van Persie and the Italian side may also be willing to throw midfielder Felipe Melo into the deal. caughtoffside.com
Stoke are close to signing on-loan winger Jermaine Pennant, 27, on a permanent contract from Spanish side Real Zaragoza. TalkSPORT
German side Werder Bremen are interested in Aston Villa's 25-year-old defender Curtis Davies, who is currently on loan with Leicester City. Daily Mirror
Villa manager Gerard Houllier has handed a trial to Colorado Rapids' Jamaican striker Omar Cummings. Daily Mail
Villa are also keen to sign striker Nicklas Bendtner from Arsenal, who may also be joined out of the Emirates exit by fellow striker Carlos Vela, midfielder Denilson and goalkeeper Manuel Almunia. caughtoffside.com
Mick McCarthy wants to bring Tottenham Hotspur striker Robbie Keane back to Wolves, the club the Republic of Ireland forward first joined in 1997. Daily Mirror
West Ham look set to sign Dieumerci Mbokani on loan from Monaco if they can get a work visa for the Congolese striker. Daily Mail
The Hammers may also look to sign Manchester United's Michael Owen on loan after the striker admitted he may have to leave Old Trafford to reignite his career. caughtoffside.com
Valon Behrami has given Roma until 10 January to reach a deal over his transfer from West Ham. The Swiss midfielder is desperate to return to Italian football after an injury-hit spell in the Premier League.Daily Mirror
Everton, Newcastle and Blackburn are chasing Barcelona's teenage midfielder Oriol Romeu. imscouting.com
Hull have been put off a bid for James Vaughan after his club Everton put a £2m price-tag on the striker. Daily Mirror
However, the Tigers are close to sealing a £1.5m-deal for Leicester striker Matty Fryatt after Foxes boss Sven Goran Eriksson admitted the player is almost certain to leave in January. Daily Mirror
England boss Fabio Capello has risked angering Europe's top clubs by backing calls for the 2022 World Cup in Qatar to be held during the winter. Capello, who is due to leave his role with England in 2012, believes it would be too hot to play in Qatar during June and July. Daily Mail
Blackburn caretaker boss Steve Kean has refuted accusations that there were underhand tactics at play when he was asked to take over from Sam Allardyce. "It was an absolute shock when I received the phone call from the chairman which was half an hour before it hit the press that Sam was going to leave," said Kean. talkSPORT
Chelsea goalkeeper Petr Cech believes the side are struggling to find "the right chemistry" this season. The Blues are on their worst run in 11 years after a 3-1 loss at Arsenal left them six league games without a win. Daily Mirror
Former Arsenal midfielder Ray Parlour believes that champions Chelsea are now out of the title race after the 3-1 defeat at the Emirates. talkSPORT
Wigan boss Roberto Martinez believes that the attacking, passing football played by sides like his own and Arsenal will benefit the next generation of English footballers. "When you play in that sort of style players are forced to make decisions and think on the pitch," said Martinez. Daily Mirror
Former Portsmouth manager Paul Hart is poised to become the new manager of Sheffield United. the Sun
Liverpool are to reward striker David Ngog with a new long-term contract. The 21-year-old has 18 months remaining on his current deal. Daily Mail
Birmingham City have upped their contract offer to winger Sebastian Larsson. The Swede, 25, who cost £1m from Arsenal, can leave at the end of the season. Daily Mirror
Aston Villa boss Gerard Houllier has revealed why John Carew was late to report for his club's Christmas programme - the striker was stuck in snow in his native Norway.Daily Mirror
RIP BOLLOX :Avi Cohen, former Liverpool defender, dies
Avi Cohen, the former Liverpool and Glasgow Rangers defender, has died in a Tel Aviv hospital after being involved in a car crash whilst on his motorbike.
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