Scunthorpe chairman Steve Wharton understands Southampton have withdrawn their offer to Nigel Adkins to fill the vacant managerial position at St Mary's.
Adkins had emerged as the man the Saints want to replace Alan Pardew, who was sacked on August 30.
Assistant manager Andy Crosby was expected to follow Adkins to St Mary's but the two clubs have failed to agree a compensation package.
And Wharton said: "The latest I've heard is that Southampton have withdrawn their offer to Nigel.
"They gave him an ultimatum to resign from his position as Scunthorpe United manager, but he was not prepared to do that until a compensation package had been agreed.
"I'm on my way to Glanford Park this morning and hopefully everything will then become clearer."