Folarin Balogun's £40 million ($54M) move from AS Monaco to Everton collapsed after the USMNT forward pulled the plug on the deal after the transfer deadline, sources told ESPN.
Balogun, 25, had traveled to Merseyside on deadline day to complete the move after the two clubs had agreed to a deal for the former Middlesbrough and Arsenal player.
But sources said that the transfer had to be renegotiated between the two clubs after an unspecified issue emerged during Balogun's medical at Everton's Finch Farm base.
With the deal in the balance, Everton tried and failed to seal a loan move for Manchester United's Joshua Zirkzee.
But with Everton offloading forwards Beto and Iliman Ndiaye on deadline day, the club resurrected the deal for Balogun and submitted a deal sheet with the Premier League to complete the deal in an additional two-hour window after the 23:00 BST deadline.
Despite the extra time to finalize the transfer, sources have said that Balogun had a post-midnight change of heart and decided to walk away from the transfer and return to Monaco.
Balogun's return to Monaco leaves Everton manager David Moyes without attacking reinforcements unless the club can now find a free agent to add to their squad.
On Wednesday, Monaco CEO Thiago Scuro blamed Balogun and Everton's medical staff for the botched move.
"The allegation of Balogun is that, 'I'm not feeling well by the way the club treated me, the way the medical team brought doubts about my future or my health. I'm not comfortable to sign a long contract here'. That the way we finished the transfer window here," Scuro said in a news conference.
"Everton contacted us to raise questions regarding Balogun's medical examination. These questions made absolutely no sense to either our medical staff or the player's personal physician," Scuro said. "The explanations provided in no way justified concerns about the player's future, because there were none. A discussion then ensued between the medical departments of both clubs. It took Everton two or three hours to conduct a more thorough assessment and consult with other doctors. This is a normal procedure when a club doctor expresses doubts.
"Meanwhile, the information leaked very quickly. And of course, Chelsea saw an opportunity. That's how it goes. All is fair in love and war. They called us.
"That's when we had to open the door to discussions [for Camara]. It was almost 8 p.m. I informed the player directly. His agent. We were discussing the terms of a possible transfer of Lamine [Camara] to Chelsea. At the same time, discussions regarding Balogun's medical were underway. Then, around 10 p.m. -- or perhaps a little earlier -- Everton let us know that there were no more problems. They were ready to finalize the deal and sign the contract.
"As soon as we received this information, we went back to Chelsea to say, 'We've reached an agreement on that front, so the Lamine deal won't go through.'
"That's part of the game. There's no reason for these kinds of discussions to suddenly be perceived negatively, as if Monaco were the 'bad guy' or acting unfairly or improperly. Everyone in football is very fair and kind. Except Monaco, apparently. I am exaggerating ...
"The Premier League has a mechanism allowing clubs to request an extra hour to finalize paperwork. That's what we did five minutes before the transfer window closed, to complete all the documents between Monaco, Everton, and Balogun," Scuro said.
"I signed the contract. Everton signed the contract. But at the last minute, the player decided not to sign. In essence, Balogun's argument was this: 'I don't feel comfortable with the way the club has treated me. I'm uneasy about the doubts raised by Everton's medical staff regarding my future and my health. I don't have any health problems, though. So I'm not at ease about signing a contract here.'
"That's how we finished our transfer business. To sum up, the story involving these two players and Tuesday's events was unprecedented for me as well. It's the first time in my career I've experienced a final day like this.
"We are now waiting for Balo's return so we can sit down, discuss, and decide together on the next steps. Other markets remain open [Turkey, Saudi Pro League], and we are holding discussions regarding various players, including Balo. Yes, it is possible that other players who are not currently our primary focus may leave within the next 48 hours."
Everton did not comment on Scuro's media briefing.