Manuel Pellegrini's side are preparing a bid for the Argentine that could rise to £3.5 million as the Premier League runners-up look to patch up their defensive crisis

By Paul Clennam Manchester City have edged ever closer to the signing of Atletico Madrid defender Martin Demichelis can reveal.Demichelis, who only joined Atletico from Malaga back in July, is keen to link with his former boss at the Etihad Stadium, with City in discussions with the Liga club over a settlement fee that could rise to £3.5 million based on success.Manuel Pellegrini is faced with something of a defensive crisis following that news that skipper Vincent Kompany is set to be unavailable for at least four weeks.The Belgium international centre-back picked up a groin injury during Monday's Premier League clash with Newcastle, with Pellegrini confirming on Friday that the 27-year-old is set to be sidelined for at least a month.He told the club's official website: "I prefer the doctor has the final word on this but I think he will be out for at least one month."If we do strengthen [at centre-back] it will not just be because of Vincent Kompany’s injury. We have a very good squad and we see what happens."Today or tomorrow we will know exactly how long Vincent will be out for."With Matija Nastasic only recently returning to training following an ankle injury and Micah Richards sidelined with a hamstring problem, Joleon Lescott is City's only fully fit centre-back going into Sunday's meeting with Cardiff City.Goal reported earlier in August that Pellegrini had given the green light over a move for Real Madrid defender Pepe , although Demichelis represents a more cost-effective option with Carlo Ancelotti's side initially demanding £30m for the Portuguese.