Town's bid to sign Franny Jeffers has collapsed over the player's wage demands. The Blues and Blackburn were close to finally agreeing a fee for the 26-year-old — a deal understood to be worth £1 million including add-ons - but Town would not match the former loanee's required terms.
Chairman David Sheepshanks told the club site the Blues made an offer to the one-time England international which could have been worth more than his contract at Ewood Park: "We made what we felt was a very lucrative offer to Franny and it was an offer that could exceed what he is earning at Blackburn - who are obviously a Premiership club.
"But unfortunately, despite our extensive efforts, we have not been able to match what the player wants financially from the deal.
"We have a duty to protect the wage structure at this club and will not put that at risk. The offer we made to Franny was a very good one in line with his status, however, now we move on.
"The positive news is that I can confirm that we have now made an offer to another player."
That man could be former Blue Pablo Couñago, released at the end of the season by Málaga and available on a free transfer. We understand boss Jim Magilton had spoken to the former Spanish U21 international even before the Jeffers deal broke down.
Couñago joined Málaga on a free transfer from the Blues in the summer of 2005 after making 69 starts and 52 sub appearances in four years with Town, scoring 36 times.
The former Celta Vigo man had a difficult first season back in Spain with his side dropping out of La Liga, Couñago making 28 appearances and scoring three goals.
Last season, in the Segunda División, the former Town number nine netted seven times in 27 games.
Couñago's 2005 release by Town followed a falling out with former boss Joe Royle, the Blues having spent his final season trying to off-load his wages which approached £20,000-a-week. If the Spaniard were to return, his salary would be significantly lower.
Magilton first targeted Couñago back in January but Málaga wanted £130,000 for the 27-year-old despite his contract having only six months left to run. The Blues boss said then that he could return for his former team-mate in the summer.
The collapse of the Jeffers deal means Town have now missed out on their top two summer transfer targets, with Richard Wright joining West Ham last week.
At the end of the season, Town appeared confident that Jeffers would sign but it appears both Blackburn and Jeffers subsequently increased their financial demands beyond the Blues' current means, even with the addition of the £2.58 million windfall from Darren Bent's move from Charlton to Spurs.
Meanwhile, released academy striker Kieran Leabon has joined Rushden and Diamonds on trial.
Elsewhere, former Town loanee Paolo Vernazza has signed a one-year deal at Weymouth.
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