Chelsea and Arsenal know they must cough up £12 million to win the race for Villarreal defender Martin Caceres.

The Mirror says Villarreal sporting director Jose Manuel Llaneza claims Chelsea have made an £8million bid for the 21-year-old centre-half.

But Real Madrid and Arsenal have also been tracking Caceres after he was chosen as the best defender in the Copa America Under-20 tournament last summer.

Chelsea have made the first move, even though their valuation is below Villarreal's £12m asking price.

Caceres, on loan at Recreativo Huelva, said: "I am calm and nothing will affect my game. I have heard the rumour about Arsenal but I haven't spoken with anyone from the club."