Celtic's hopes of signing Yukinari Sugawara from Southampton look slim.
The 26-year-old right-back, who has attracted interest from Celtic, is close to joining Cagliari.
Sky Sports revealed Celtic's interest in Sugawara as cover for the injured Alistair Johnston, out until late October.
However, the Japan international is reportedly not keen on a move to the Scottish champions at this stage of his career.
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Cagliari are now leading the race for Sugawara's signature. Sky in Italy reports that the Serie A club is near to agreeing a loan deal with a purchase option for the Southampton defender.
Sugawara is considering his options before making a final decision.
Southampton are open to loan offers, but with Cagliari in pole position, Celtic's hopes of a move before Wednesday's UEFA registration deadline are fading.
Celtic have identified several right-back targets as cover for Johnston, but with Sugawara expected to move to Italy, they will have to look elsewhere.