Spanish giants Real Madrid are set to offer £20 million, plus Argentine striker Gonzalo Higuain for want-away Liverpool striker Luis Suarez, according to The Sun.
The bid will come as a blow to Arsenal, who have been linked to both Higuain and Suarez this summer.
The Gunners were quietly confident of securing the signature of the Uruguayan striker for £40 million and have already had an offer rejected for the former Ajax player earlier in the week.
However, the north London club now look set to miss out on one of their top transfer targets.
Reports have suggested that Luis Suarez would prefer a move to Real Madrid over Arsenal, and with Higuain part of a deal to go the other way, the Uruguayan may get his wish.
However, the Reds have confirmed Luis Suarez in the 27-man squad for their pre-season tour of Indonesia, Australia and Thailand.
It seems likely that the Merseyside club will be unwilling to sign their prized asset to a fellow Premier League side, so, Real Madrid will be confident of securing his signature.
For Liverpool, if they can get Higuain in return, they will not have to worry about finding a replacement for their want-away star.
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