Liverpool and Manchester United could miss out on signing Sheffield Wednesday's promising left-back Yisa Alao, as Chelsea are reportedly preparing to swoop in. The 17-year-old has been making a name for himself in the Championship with his recent performances for the struggling club.

Both Liverpool and Manchester United have already tabled offers for the young talent, according to the Daily Mail. However, they may face stiff competition from Chelsea, who are rumoured to be ready to outbid their rivals.

Alao has made his way into Sheffield Wednesday's first team this season and has been offered his first professional contract. Yet, he seems hesitant to commit to Hillsborough, leaving the door open for other clubs to step in.

• Jamie Carragher explains why Diego Simeone would be a problem for Man Utd

• Man Utd transfer for Barcelona star thrown into jeopardy by Conor Gallagher's Spurs move

While Liverpool's bid remains undisclosed, it's reported that United have put forward around £400,000 plus significant add-ons. Chelsea, on the other hand, are said to be gearing up to offer £600,000, along with substantial performance-related bonuses as per the same report.

Alao's decision will likely hinge on the career opportunities that the interested clubs can provide. His rise at Sheffield Wednesday comes amidst a period of instability for the club.

The Owls were plunged into administration last October and have been hit with an 18-point deduction by the EFL. The financial turmoil has also resulted in unpaid wages and the club having to rely on young players to fulfil their Championship fixtures.

A consortium spearheaded by James Bord has been chosen as the preferred bidder, bringing a takeover one step closer. The process is now awaiting final approval.

Currently, Wednesday find themselves languishing at the bottom of the Championship table, with a dismal -7 points. Alao has been handed an opportunity following Harry Amass' return to Manchester United.

The left-back spent the first half of the season on loan with the Owls, where he impressed with his performances. He has since returned to Old Traffor,d where a decision will be made over his short-term future.

FOLLOW OUR MAN UTD FB PAGE!Latest United news and more on our dedicated Facebook page

Wednesday are keen to extend the deal to the end of the season. But they face competition from other Championship clubs who are expected to be able to offer a better financial package to United.

Alao made his first senior appearance in the FA Cup third-round match against Brentford earlier this month. He was then selected for the starting XI in last weekend's Championship game against Portsmouth.

Liverpool and United, meanwhile, have had a quiet transfer window thus far. Defender Mor Talla Ndiaye is the sole new recruit at Anfield this month, with the 18-year-old set to link up with the club's U21 team as he continues his development.

Players such as Curtis Jones and Federico Chiesa have been rumoured to be on their way out but a move this month seems some way off at present. So far, the only confirmed departure at Liverpool is young talent James Norris, who moved to Shelbourne on New Year's Day.

United haven't been involved in any January deals yet, with no incomings and no outgoings. Toby Colleyer's return from his loan at West Brom is the only thing of note that has been confirmed this month, despite persistent rumours linking United with the likes of Ruben Neves, Joao Gomes, Yan Dimonade and Barcelona star Marc Casado.

Join our new MAN UTD WhatsApp community and receive your daily dose of Manchester United content from Mirror Football. We also treat our community members to special offers, promotions, and adverts from us and our partners. If you don't like our community, you can check out any time you like. If you're curious, you can read our Privacy Notice.