BILD says Stuttgart are to submit an increased, but also final, offer to Brighton next week.
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The new offer will be between €23-25m plus bonuses. The Seagulls rejected €23m excluding extra payments around two weeks ago.
Undav played for Stuttgart on loan last season, playing his way into the Germany Euros squad.
As a result, VfB exercised a purchase option worth €20m, before Brighton exercised a buy-back clause for the same amount.