I have now heard from various sources including some on the Everton side and I am starting to think this story has some traction.
From what I hear Liverpool are in advanced negotiations with Everton to sign Mikel Arteta for a fee of around £12 million. The irony is that Mikel would be replacing his childhood friend Xabi Alonso as he heads to Real Madrid.
It would make perfect sense why Mikel would like to move to Liverpool. Everton are a small team and without Champions League football it is impossible for him to break into the Spain National team as he has publicly stated that he aspired to do. Mikel knows how much clout Rafa has in Spain and players such as Riera, Luis Garcia & Arbeloa were able to break into the team while at Liverpool. Mikel is also eligible to play for England so England might be an option for him and Rafa would be covered if the new FIFA rules go into effect.
My concern with Mikel is that he has be plagued by injuries in the past and hopefully he is over that now. The other concern I have is that his idol is Josep Guardiola (yep the current manager of Barcelona) and might use Liverpool as a springboard for a quick return to La Liga.