Manchester City will reportedly go no higher than £20m with their January bid for Arsenal forward Alexis Sanchez, according to a report.

The Citizens were left frustrated during the summer transfer window as they missed out on their top attacking target, who is out of contract in North London next July.

After reportedly accepting City's £60m offer on deadline day, Arsenal later pulled the plug on the transfer as they were unable to bring in a suitable replacement in the final hours of the window.

Pep Guardiola is widely expected to return for Sanchez in the New Year, however, with The Sun reporting that the former Barcelona ace is confident of reuniting with his former boss at the Etihad Stadium.

It is claimed that City will offer just a third of the amount tabled last week, though, knowing that the Chile international will have even more bargaining power in the final throes of his existing deal.