Chelsea are looking to take advantage of delayed contract negotiations between Real Madrid's Pepe and the club's management.
The 28-year-old is said to be annoyed with the lack of progress in talks over an improved contract at Madrid.
Los Blancos are actually willing to offer him a £4million a year contract while the Blues are reportedly ready to tempt him with a yearly £5million deal.
New manager Andre Villas-Boas is looking to secure his first major signing as he begins to shape a new-look Chelsea side.
The 6'2 defender was transferred from Porto in 2007 for £30million.He is one of Madrid's most exceptional performer last season as he formed a formidable partnership with fellow Portuguese international and former Chelsea player Ricardo Carvalho and has conceded a meager 43 goals in 59 games.
Central defense is an area of concern for the London based outfit, as their first choice pairing of Alex and John Terry struggled for form last season.
Pepe can also operate as a defensive midfielder is rated at £22million.
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