Simao was apparently set for a £10m move
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Liverpool's move for Benfica winger Simao Sabrosa has broken down after the two clubs failed to agree a deal.
The 25-year-old had been given permission to fly to Anfield for a medical but Liverpool refused to meet Benfica's asking price for the player.
Liverpool are thought to have increased their initial £7m offer to £10.2m but Benfica were holding out for £13.6m.
Having missed out on Michael Owen, the Reds seem to have failed in their bid to find a replacement for Milan Baros.
Baros joined Aston Villa in a £6.5m move last week.
Benfica sporting director Jose Veiga said Simao would be
disappointed that the deal had fallen through.
But Veiga told the Renascenca radio station: "I am convinced that Simao will not be against us because he is a great professional and he has proved this throughout the years he has played for Benfica."