Manchester United have made a bid worth just under £74m (€85m) for RB Leipzig striker Benjamin Sesko.
The fee is an initial £65m plus around £8.9m (€75m + €10m) in performance-related add-ons.
Newcastle have also been working on a deal for Sesko.
They made a second bid of £69.7m plus add-ons, which was higher than Manchester United's - after an initial offer of just under £70m (€80m) plus add-ons.
RB Leipzig are now internally discussing and evaluating the Newcastle and Man Utd offers and their structures, according to Sky in Germany.
Sesko has been open to both projects, but one source told Sky Sports News he is leaning towards Manchester United.
The 22-year-old was absent from RB Leipzig's pre-season friendly loss to Atalanta on Saturday due to his expected departure from the club. The striker, who has told his team-mates that he will be leaving, trained indoors away from the team at Leipzig's training complex on Tuesday.
Man Utd's bid for Sesko could have ramifications for Newcastle striker Alexander Isak.
Newcastle will only let Isak leave St James' Park if they can bring in a ready-made replacement.
Liverpool had a bid of £110m plus add-ons rejected by the Magpies.
Newcastle are also interested in Yoane Wissa, who was not part of Brentford's squad for their friendly against QPR on Saturday as he pushes for a move.
'Leipzig likely to let Sesko decide'
Sky Sports News' Keith Downie:
"Newcastle have been internally concerned that if Manchester United come to the table, Sesko favours a move to Old Trafford.
"Manchester United's offer, totalling £65m plus around £8.9m (€75m + €10m), is short of Newcastle's. They offered around £5m more.
"Newcastle have offered more up front and more in total but Manchester United have come to the table.
"One source maintains that the player favours a move to Manchester United.
"He is open to both moves and it is not that he is against Newcastle - but if it came to the two, Manchester United would be the choice.
"We are yet to hear back from RB Leipzig on Newcastle or Manchester United's offer.
"It is a confusing situation. Internally, they were given encouragement that the player would be up for a move to Newcastle.
"It feels, from the noises we are hearing, that Leipzig will leave it up to the player to decide.
"We have not heard the last of this one. There will be more negotiations to come."
Could Hojlund leave United?
Manchester United's pursuit of Sesko raises questions over Rasmus Hojlund's future at Old Trafford, with the club understood to be listening to suitable offers for the striker.
It was thought United would have to make sales in order to bring in a striker. However, while the priority is to offload players, it is understood Ruben Amorim's side can buy before selling, provided there are sales before the window closes.
It is understood Leipzig are interested in Hojlund and have explored the conditions of a loan. Leipzig had proposed taking the striker on loan as part of any possible deal for Sesko.
Hojlund has started two of Manchester United's four pre-season games so far and scored in their 4-1 win over Bournemouth, but the possible arrival of a new striker could limit his game time.
A scenario where Sesko joins and Hojlund stays cannot be ruled out.
Manchester United and Newcastle are locked in a battle for Sesko this summer - but what makes the RB Leipzig striker so appealing?
Sesko has scored 39 goals in 87 games for RB Leipzig since joining from Red Bull Salzburg two years ago but what qualities would the 22-year-old bring to the Premier League?
And could he really be the next Erling Haaland?
Read Nick Wright's feature here.
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