Real Madrid will pursue David Alaba for a third time, offering Bayern Munich a fee of $72.4 million (€65 million).
Bayern are asking for the full $72.4 million plus Pepe. Several weeks ago Bayern tried to include Varane in the deal.
Bayern previously had an asking fee of €80 million for Alaba as Real Madrid, Manchester City and Manchester United were interested.
Real Madrid have been trying to sign Alaba from Bayern since January.