West Ham United has identified Celtic midfielder Arne Engels as a transfer target.
The club also agreed to sell 22-year-old Freddie Potts to Belgian champions Club Brugge for a fee exceeding £10 million on Saturday.
The Hammers accepted a package worth up to £10.2 million for Potts. The academy product is scheduled for a medical in Belgium.
Potts decided to leave after West Ham sold Mateus Fernandes to Tottenham Hotspur and Crysencio Summerville to Al-Hilal.
Celtic's O'Neill Confirms West Ham Approach
Celtic manager Martin O'Neill confirmed that West Ham made an approach for 22-year-old Engels. However, the initial bid fell below the Scottish champion's valuation.
O'Neill also revealed that Everton manager David Moyes contacted him regarding potential interest in Canadian defender Alistair Johnston.
The Scottish club faces potential midfield depletion after Daizen Maeda departed to Ipswich Town for £10 million earlier.
Celtic have brought in Kasper Hogh and Camilo Duran as reinforcements.
"Everton have been in contact," said O'Neill.
"I'm not sure whether there's been a bid in there for that one, but they've been in contact saying that there would be."
The Celtic manager noted that Moyes personally reached out to give advance notice about Everton's interest in the Canadian defender.
"In fairness, David Moyes did call me last week to say there would be contact," said O'Neill.
The manager acknowledged the reality of top European clubs targeting his primary squad members ahead of the domestic league opener against Dundee FC.
"I felt that something would happen with some of our top players," said O'Neill.
Celtic remains active in the transfer market to replace departing players while managing external interest in key starters.
"I was hoping as each day went past that there wouldn't be any serious interest. But that was never going to happen," said O'Neill.
The Glasgow club is working on potential incoming transfers to bolster the squad before the deadline.
"But we need players in anyway. And we're on the hunt for that.
We're getting close. I don't know how close is close, but we are definitely getting close," said O'Neill.
Former Celtic forward Chris Sutton publicly criticized the potential move, questioning the logic of leaving a European-competing side for a second-tier English team.
"If Engels wants to go there right now it would be a lack of ambition for me when they are in the Championship.
I know West Ham will pay big money, but you can't go there with the assumption they will go straight back up to the Premier League," said Sutton.
The former striker highlighted the physical and competitive challenges of the second division in English football.
"The Championship is a notoriously tough division to get out of and Engels should be aiming his sights at the top tier and competing in Europe - not battling for promotion.
It would be a strange one, but it does look like he's going, which will leave Celtic looking even lighter in midfield," said Sutton.
Potts made 22 Premier League appearances last season for West Ham and previously completed a loan spell at Portsmouth.
At Club Brugge, the English midfielder is expected to replace Raphaël Onyedika, who is finalizing a transfer to Eintracht Frankfurt.
