Mateo Kovacic
Mateo KovacicReuters

Manchester United and Liverpool have suffered a blow in their pursuit of signing Inter Milan star Mateo Kovacic after news that Real Madrid boss Carlo Ancelotti has held talks with his agent.

Los Blancos are looking to strengthen their midfield as a top priority for the summer and even though the rush is not imperative after winning the coveted Champions League, the club want to improve their gilded squad even further.

Kovacic, who joined Inter from Dinamo Zagreb in 2013, is among the most talented midfielders to come out of the Balkans in recent years, having made the Inter starting line up at just 19 years of age.

Although a spat with the Inter management has seen him lose his starting place, Kovacic has been a regular figure this season, making 28 league appearances so far. The midfielder's sudden rise has seen him receive a call for Croatia's national team as he made his debut against Serbia in March 2013.

Tony Kroos, Paul Pogba and Arturo Vidal have all been linked with a move to the Santiago Bernabeu in recent weeks. But with Juventus unwilling to listen to offers for Pogba bellow €60m, and with Kroos ready to stay at Bayern Munich, Sky Sports Italy claims Ancelotti has been in contact with Kovacic's agent Nikky Vuksan.

Spanish daily Marca has previously reported Ancelotti's interest in the Croatian youngster, claiming he is among the Italian's top targets.

Kovacic is currently in Brazil with Croatia, and played 60 minutes of their opening World Cup match against the hosts yesterday.