Real Madrid could yet lose out in their pursuit of Espanyol defender Mario Hermoso.

The centre-half, formerly with Castilla, is on the agenda of Real - which boast a buy-back option in his original deal.

While Hermoso's buyout clause is set at €40m, Real can re-sign him for a knockdown €7.5m.

However, there is a catch, as the option is not unilateral. Hermoso could still turn down a return and move elsewhere.

Along with Real, Hermoso is also being linked with Arsenal ahead of the January market.