Portuguese club Benfica are lining up an ambitious bid for Real Madrid striker Alvaro Morata this month, according to the Daily Mirror.

Arsenal are set to make a loan bid for the impressive young striker but Benfica want a permanent deal and are set to open the negotiations with a £7million bid.

Real Madrid boss Carlo Ancelotti has claimed that he will not be doing any business this month in terms of buying or selling although the Gunners are hopeful of doing a deal.

With Theo Walcott out for the season, the versatile Morata is now Wenger’s number one target as he can play either centrally or on the wing, giving Arsenal more options should injuries continue.

Benfica have raised some cash to make a major winter signing in order to end the season with some silverware.

Madrid are unlikely to want to allow one of their hottest prospects to leave permanently, but a six month loan move could be beneficial for all parties.