Manchester City have had their opening bid for Elliot Anderson rejected by Nottingham Forest, sources have told ESPN.
City have made the 23-year-old their top summer target and have formalised their interest with an official offer.
The bid has been turned down by Forest, but City are expected to return with an improved financial package.
City bosses, according to sources, are not anticipating a swift resolution with Anderson now away with England at their World Cup training base in Florida.
The two clubs remain apart in their valuation of Anderson.
Forest are hoping to generate a fee of around £120 million ($161m) while City's initial valuation is closer to £80m ($107m). Manchester United are also interested, but Forest's valuation is a substantial hurdle.
City, according to sources, are also monitoring right-backs and right wingers ahead of the summer transfer window.
The club are looking for a young right-back to provide competition for Matheus Nunes, who was first-choice last season. City sources insist the club are happy with Nunes and are not looking to replace the 27-year-old.
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Rico Lewis' future is in doubt after a frustrating season at the Etihad Stadium. The 21-year-old, who was wanted by Forest last summer, is weighing up his options before making a decision on whether or not to push for a move away.
Meanwhile, City remain in talks about compensation owed to Chelsea before they are able to appoint Enzo Maresca as their new manager.
Maresca, who left Stamford Bridge in January, has been chosen to replace Pep Guardiola, but the announcement, which was pencilled in for late last week, has been delayed by ongoing negotiations with Chelsea.