Manchester United and Chelsea's pursuit of Joao Mario has hit a snag with news that Sporting Lisbon are set offer him a new deal.

The Red Devils are believed to be very keen on the 23-year-old while reports suggest that Chelsea lodged a £38million bid for the midfielder prior to Euro2016.

There is a great amount of interest in Mario but the Premier League giants could be set to miss out after it emerged that Sporting were on the verge of offering new and improved terms.

Portuguese publication Jornal de Noticias reports that Sporting want to reward Mario, who has made two appearances for Portugal at the Euros, while warding off any potential suitors.