Manchester City signed Kevin De Bruyne this summer for around €75 million, but according to The Guardian they don't have enough attacking midfielders as they are approaching Isco. Manuel Pellegrini coached Isco when their Málaga team reached the Champions League Quarterfinals and the Chilean coach has been keen on the midfielder ever since.
Isco has an undetermined role with Real Madrid now that James Rodríguez is shining. There is simply no room in the starting XI for him unless one player out of James, Bale, Ronaldo and Benzema gets dropped, so Benítez will have to manage his minutes carefully in order to avoid a problem.
Isco is so good that he could start in almost every team, so it will be interesting to see if he has the patience needed to wait on the bench or not. If Manchester City make a good offer and the player wants out, Real Madrid will probably have to accept.