The Reds were interested in the 21-year-old, who could have been a great replacement for Anfield legend Mateo Kovacic. However, Los Merengues have now been given permission to speak to the midfielder, and it looks likely that they will beat them to the Nerazzurri man.
However, this does open up another option for the Merseyside outfit, with it leaving Los Blancos a player heavy. With the Croatia international arriving at the Bernabeu, Rafael Benitez may decide to let Asier Illarramendi leave.
The 25-year-old has been a bit-part player for the La Liga giants in his two seasons with the club, and could be available for just £16 million. A defensive midfielder who is also comfortable on the ball, he could be the perfect addition to Brendan Rodgers’ side. Along with James Milner and Jordan Henderson, the Spaniard could help to control the middle of the park against many Premier League teams.