AC Milan have agreed terms with Carlos Tevez and are waiting to hear back from Manchester City about their latest offer for the Argentine forward.
Milan chief executive Adriano Galliani revealed the news when asked by journalists whether or not Brazilian forward Alexandre Pato is for sale.
"We are not negotiating the sale of Pato, I have an agreement with Tevez but not with City," he said.
Galliani said on Thursday he had sent an "imaginative" offer to City which the Italian press claim consists of a loan until the end of the season with an obligation to buy, under set conditions, in the summer.
However, City have already rejected a previous offer from Milan to borrow the player, claiming they will only sell him outright.
Italian press on Saturday claimed Inter Milan have entered the bidding by offering 25 million euros for the 27-year-old.
Both of those bids, however, are believed to be well below the 35 million euros French league leaders Paris St Germain have allegedly offered.
It was reported earlier that AC Milan coach Massimiliano Allegri displayed a greater desire to retain the services of Brazilian forward Pato rather than acquire Tevez when he spoke to the press on Saturday.
Many in the Italian press believe Milan will sell Pato -- possibly to Paris St Germain where he could link up with former coaches Carlo Ancelotti and Leonardo -- to make way for Tevez.
Those rumours gained momentum when the young Brazilian complained during the winter break that his coach needs to give him more direction.
That was in response to criticisms from Allegri but the coach claims he wants Pato to stay, more so seemingly than he wants Tevez to join.
"There has never been a problem between me and Pato and if there was then it's been resolved," he said.
"I think he'll stay at Milan, I want him to stay at Milan."
However he appeared to contradict himself when he added: "I think he could be an important signing in January given that he only played a little during the first half of the season."
But Allegri didn't seem totally convinced by the plan to buy Tevez, a deal chief executive Adriano Galliani is working hard to push through.
"I spoke to Galliani yesterday but we spoke about the team not transfers," said Allegri.
"I don't know if Tevez will join but if he does join I'll have the problem that he's not played for two months.
"Right now we need to concentrate on the continuation of the championship which will be difficult against a dangerous team such as Atalanta."
Although down in the bottom half, Atalanta have only been beaten twice this season -- the same as Milan -- and but for a six-point penalty for match-fixing would be fifth.
Allegri will be without a raft of midfielders for the tricky trip as Massimo Ambrosini, Gennaro Gattuso, Clarence Seedorf, Alberto Aquilani and long-term injury victim Mathieu Flamini are all unavailable.
Veteran Alessandro Nesta is ready to return to the team but Allegri said French centre-back Philippe Mexes will partner Thiago Silva.
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