West Ham are set to lose out to Borussia Dortmund in the race to sign Ajax’s Edson Álvarez and are planning to press ahead with a move for Fulham’s João Palhinha as they hunt for replacements for Declan Rice in central midfield. Ajax want £40m plus £5m in add-ons for Álvarez and West Ham have decided the Mexico international is too expensive. That has left the path clear for Dortmund, who are favourites to sign the midfielder as they look to rebuild after selling Jude Bellingham to Real Madrid. West Ham will have funds to play with once they sell Rice, who is expected to join Arsenal for at least £100m. David Moyes wants two midfielders, with Southampton’s James Ward-Prowse and Manchester City’s Kalvin Phillips in his thinking, and Palhinha is a key target. Palhinha has impressed since joining Fulham for £20m last summer and Marco Silva will not want to lose the former Sporting Lisbon player. Fulham are expected to demand £50m for the Portugal international, whose tough tackling caught the eye during his debut Premier League season, and West Ham will need to decide whether that represents value. West Ham, who qualified for the Europa League after winning the Europa Conference League, are yet to receive a new bid from Arsenal for Rice. They turned down Arsenal’s opening offer of £80m plus add-ons and expect Manchester City to bid. Rice has also been targeted by Bayern Munich, Chelsea, Newcastle and Manchester United. Moyes has long been a fan of Ward-Prowse, who is expected to leave Southampton after their relegation. Ward-Prowse is a proven Premier League player, which could enhance his appeal to West Ham, and his threat from set pieces would make him a good fit in a Moyes team. Phillips is unlikely to want to leave City this summer. West Ham had a bid rejected for the England midfielder when he was at Leeds. West Ham also want a left-winger and are interested in Harvey Barnes, who is available after Leicester’s relegation. Aston Villa, Newcastle and Tottenham also want Barnes, who scored 13 goals last season.