Emirates and Anfield clubs want highly-rated centre-back.
Liverpool and Arsenal are battling for the £8million signature of Birmingham City defender Scott Dann.
Both clubs are in desperate need for a new centre-back and feel the 24-year-old represents the best value for money.
The managers, Kenny Dalglish and Arsene Wenger, have both suffered injuries to key personnel in pre-season and want to strengthen before the season starts this weekend.
Dalglish has seen his Liverpool side concede 15 goals in six friendlies, while losing Martin Skrtel and Glen Johnson before the season has begun.
Dann was born in Liverpool and is tempted by a return to his hometown to become the Reds’ fourth British signing of the summer.
Arsenal are in the hunt for more defensive cover after injuries have hit Thomas Vermaelen and Kieran Gibbs.
Wenger was already going to add another centre-back to his squad with Bolton’s Gary Cahill top of his wanted list, as the Frenchman looks to solve his defensive problems.
The Gunners boss will now make a move for Dann as Vermaelen, Gibbs and Johan Djourou all have a history of suffering from injury.