The reason is because Gala—who were defeated 2-1 by Osmanlispor at the weekend—insisted on having a buy-out clause in the contract, but the Citizens refused to agree to such a caveat.
Denayer watched the Lions in action at the weekend, and his move had expected to be a formality.
He has now returned to England, and it remains to be seen whether another one of his suitors—Olympique de Marseille have been linked to his signature [Daily Mail]—will look to move for the 20-year-old.
Denayer spent last season on loan at Scottish heavyweights Celtic, impressing for the Buoys with two assists and six goals in 44 outings as the Glasgow side romped to the Scottish league title.
Manchester United transfer news
Manchester United drop transfer hint by leaving Real Madrid target out of squad
Ten most valuable Premier League clubs: Arsenal, Manchester United, and Liverpool in top five
He left Celtic Park at the end of his temporary stay, only to be replaced by another City defender, Dedryck Boyata.
Should Denayer remain at the Etihad Stadium, it’s hard to see the youngster getting a game this season, with Vincent Kompany, Eliaquim Mangala, Martin Demichelis and new signing Nicolas Otamendi all ahead of him in Manuel Pellegrini’s pecking order.