Watford and Newcastle United are still engaged in talks over a deal for Joao Pedro.

The forward has been the subject of two formal offers from Newcastle, per the Daily Mail.

The Magpies' second offer is as high as £25 million.

Joao Pedro is only 20 and Watford see him as a prized asset they do not want to lose.

While he would prefer to be back in the Premier League, Pedro is remaining professional, which Watford can use to try and get a big fee for his signature.

The Hornets are said to want £35 million.

The source also adds that Newcastle are monitoring Rennes winger Kamaldeen Sulemana and Chelsea's Christian Pulisic.