Real Madrid are reportedly open to the idea of letting Pepe join Chelsea - providing they get David Luiz in return.
Luiz, who joined the Blues from Benfica last January in a deal worth around £22million, had initially impressed after making the move to the Premier League, but this season has struggled under Andre Villas-Boas and has made a number of costly mistakes.
A report on Sunday morning had suggested that controversial Madrid defender Pepe, who has been on Villas-Boas' radar since last summer, could be on his way to Stamford Bridge this summer (see below).
And according to Portuguese newspaper A Bola, Los Blancos are keen on a swap deal involving Luiz.
The Spanish giants are said to be prepared to listen to offers for Portugual international Pepe at the end of the season, largely as a result of his stamp on Lionel Messi during the first leg of their Copa Del Rey quarter-final clash with rivals Barcelona earlier this month.