The 20-year-old Rayo Vallecano striker has a £6.5million release clause written into his current contract, but it's believed the Spanish club will allow Baptistao to leave for £4million, if Atletico include a player in the deal.
Red Devils boss Sir Alex Ferguson has sent scouts to watch the Brazilian frontman, with a view to bringing him to Old Trafford in the future.
However, Manchester United now look set to miss out on the South American star, with Spanish newspaper AS reporting that representatives from Rayo Vallecano and Atletico Madrid were locked in talks at the Vicente Calderon Stadium on Thursday afternoon.
Baptistao has netted six La Liga goals this season, and is likely to be loaned back to Rayo until the end of the 2012/13 campaign, if the deal is successfully negotiated between the two clubs.
Do YOU want to write for GiveMeSport? Get started today by signing-up and submitting an article HERE: http://gms.to/writeforgms