Everton are in discussions over a three-year contract for Vitor Pereira to become their new manager.

Positive talks have taken place with the Portuguese although his present club, Shanghai SIPG, are prepared to make a lucrative counter offer to keep him in China.

It is understood that it remains Pereira’s preference to return to coach at a major European club and Everton are hopeful of appointing the 41 year-old, although they are aware that there could potentially be other offers for him.

Pereira earns an astonishing €23 million at Shanghai SIPG who are prepared to offer him even more money to stay even if it is just for one more year.

Pereira is the favourite for the permanent post, although there is a possibility that if he does not agree a deal Everton could pursue former Chelsea manager Carlo Ancelotti, if he is sacked by Napoli.

Contact has also been made with Unai Emery who was dismissed by Arsenal. The Gunners would be saved a big compensation bill if Emery made an immediate return to management in the Premier League, although the Spaniard may choose to take his time before seriously considering offers and it is unclear how serious Everton’s interest in him is.