After seeing their deadline day efforts to sign the Chile international fall through during the summer transfer window, City have returned with a £20m bid for Sanchez this month. Reports suggest the club have already agreed personal terms with the forward having offered him a £250,000-per-week deal but with Arsenal still to respond their offer, United have entered the fray with a bid in the region of £25m, the Guardian report.
United are prepared to offer Sanchez and more lucrative deal than City with the report adding Jose Mourinho is confident of beating his old rival Pep Guardiola to what would be one of the biggest deals of the mid-season window.
To sweeten the deal, United have also offered Arsenal the chance to sign Henrikh Mkhitaryan, with the Armenia international out of favour under Mourinho at Old Trafford. Wages could be an issue, however, with Mkhitaryan, who was strongly linked with a move to north London before arriving in Manchester, reportedly earning around £200,000 on a deal he signed upon his arrival at the club just 18 months ago.
Arsene Wenger has not publicly given up hope of Sanchez extending his stay beyond the summer when his current contract expires, insisting after Wednesday's [10 January] goalless draw with Chelsea in the Carabao Cup his player still has five months to sign a new contract.
"Look, I have no problem if he signs now or in June," Wenger said. "What is important for me is the next game and that you can rely on him.
"The only thing I want to say is the performance of Alexis and the commitment does not depend on the duration of his contract, it just depends on the fact that when he's on the pitch he wants to play."
Both the club's hopes of holding onto the Chilean are said to be diminishing, with both Manchester clubs now pushing for a move in the coming weeks.