Arsenal are reportedly prepared to go head to head with Premier League rivals Everton for the signing of Real Madrid midfielder James Rodriguez.

The Colombia international has fallen down the pecking order at the Santiago Bernabeu and speculation persists regarding an exit this month.

Madrid are believed to have ruled out a loan move, but a number of teams may look to snap up the former Bayern Munich loanee on a permanent contract.

Everton, managed by former Los Blancos boss Carlo Ancelotti, are rumoured to be one of the sides interested in Rodriguez, while a report in Spain suggests that Arsenal are also keen.

New boss Mikel Arteta is said to be after more quality in midfield and has set his sights on Rodriguez, who has started a combined five La Liga and Champions League matches for Madrid this term.

Arsenal supposedly value the 28-year-old at the £47m mark.