SUNDERLAND will make a formal approach for Preston manager Simon Grayson if there is no significant progress with the club’s ongoing takeover talks in the next two days.

Discussions with an unnamed German consortium have reached a critical stage, with negotiators on both sides thrashing out the precise details of the financial arrangement that will see ownership of the Black Cats transfer from Ellis Short.

Short is understood to be satisfied with the broad outline of a proposed deal, with the German group having agreed to pay around £85m for 100 per cent ownership of the club.

However, there are still a number of key issues that need to be resolved before a sale can be concluded. Satisfying the requirements of a pre-existing bank loan worth around £35m is one issue that is understood to have commanded a large amount of attention, along with Short’s demand that he receives a significant bonus if Sunderland win promotion to the Premier League in the next few seasons.

Talks remain ongoing, but while there is still a desire from both sides to reach a satisfactory agreement, there is also an acknowledgement from Short and managing director Martin Bain that the clock is ticking in terms of Sunderland’s pre-season preparations.

Sunderland’s players are due to return to the Academy of Light later this week, and while first-team coach Robbie Stockdale has been primed to take charge of the early pre-season sessions, there is an acceptance that the temporary arrangement cannot be allowed to drift for too long.

Stockdale is not regarded as a viable long-term managerial option, and both Short and Bain are aware that the German group are keen to bring in their own boss if they complete their takeover.

Sources in Germany claim Union Berlin’s Jens Keller has been lined up in the event of a successful buyout. The 46-year-old previously spent two seasons in charge of Schalke, and led Union Berlin to a fourth-place finish in the German second tier last season.

He would regard a move to Wearside as a step up in his career, but his appointment is obviously dependent on the German consortium assuming power at the Stadium of Light.

Jurgen Klinsmann, who has been out of work since his dismissal from the United States national set-up last November, has also been discussed as a potential target.

The German group will be pushed to prove evidence of progress within the next 48 hours, otherwise Short will carry through with his threat to bring an end to discussions and effectively take Sunderland off the market for the next 12 months.

That would enable Bain to pursue Grayson in the knowledge he could offer the former Leeds United boss a degree of short-term security that is clearly not evident at the moment.

Preston would demand compensation for Grayson’s services, but having previously been willing to pay Aberdeen £1m in order to appoint Derek McInnes, Sunderland have budgeted for such an eventuality.

Grayson feels he has taken Preston as far as he can after guiding them to a mid-table finish in the Championship last season, and while Sunderland’s transfer budget would be severely restricted in the event of takeover talks collapsing, it would still be much higher than the fund the 47-year-old would have at his disposal at Deepdale.

Grayson is aware of Sunderland’s ongoing interest in his services, and while he talked up his position at Preston when he spoke publicly on the situation last week, it was telling that he did not close the door on a potential move to the Stadium of Light.

Nigel Pearson was also touted as a potential managerial option in the wake of David Moyes’ departure, but the former Derby and Leicester boss has ruled himself out of the running.

Pearson, who was interviewed by Middlesbrough before Steve Gibson appointed Garry Monk, has also held an initial round of talks with Bain, however he does not regard the Sunderland job as an attractive proposition at the moment.

Meanwhile, veteran defender John O’Shea remains keen to sign a new deal on Wearside despite competing interest from Wolves.

O’Shea has told Wolves officials he wants to see how things play out with Sunderland’s takeover talks before deciding on his future plans.