Manchester City want to bring the 30-year-old Pepe to the Etihad Stadium, according to the Daily Mail.
The Portuguese defender is a player that City boss Manuel Pellegrini believes can strengthen his new defence.
Pepe brings much European and international experience which, when teamed up alongside Vincent Kompany, could produce one of the strongest centre-back pairings in Europe.
Pepe was an integral part of Real Madrid's defence last season, but his first-team place could be under threat by the new starlet, Raphael Varane.
Furthermore, Madrid are reportedly interested in Chelsea's David Luiz, who would be a potential replacement for Pepe, should he leave this summer.
However, Real Madrid maintain they want £21m for the Portugal international, who has been a key player for Los Blancos for a number of years now.
Manchester City, on the other hand, have offered just £17m.
This is just the beginning of negotiations, though; and if Pellegrini really wants Pepe to join him in Manchester, then surely a higher bid will be made, and both teams will arrive at some conclusion.
Furthermore, the Daily Express claim that City are willing to double Pepe's wages which currently sit at £3m-per-annum. Though this would be risky with such a controversial character.
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