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Real Madrid defender Pepe could reportedly make a surprise move to Manchester United or Manchester City should contract talks at the Bernabeu break down.

Manchester United and Manchester City are reportedly battling it out for the signature of Real Madrid defender Pepe.

A report in Spanish publication Marca claims that the 31-year-old, whose current deal at the Bernabeu expires in 2016, could be on his way out of the club if new terms are not agreed.

It is thought that Premier League rivals City and United could make a move for the Portuguese centre-back in January as they look to strengthen their respective squads.

Pepe, who joined Madrid from Porto in 2007, has made 21 appearances in all competitions for Los Blancos this season.

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