Birmingham boss Alex McLeish has admitted defeat in his bid to sign Sporting Gijon midfielder Michel in a £2.5million deal before the transfer window closes.
McLeish had been tracking Michel for several weeks and was desperate to bring the playmaker to St Andrews. But it is understood negotiations broke down because Sporting wanted a bigger downpayment than City were prepared to pay for the 23-year-old.
"We couldn't get the Michel deal over the line which is a shame because I believe he is a very good player who would have enhanced our team," said McLeish.
"It would have been a much-needed boost to the squad if we could have got him in.
"The stumbling block has been about money, about payments and the way they are made, agents, everything came into it.
"The club had stated their stance on it from day one and they haven't wavered on that. We were hoping to tidy things up at the Sporting Gijon end but it wasn't to be."
McLeish is still hoping to bring in a midfielder before the 5pm deadline and is now investigating the possibility of signing Real Betis' Achille Emana.
The 28-year-old nearly moved to Portsmouth two years ago but failed to secure a work permit.
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