Reading manager Brendan Rodgers has not yet given up hope of signing Watford striker Tommy Smith.
The Royals boss has been keen to set up a reunion with his old Hornets charge but Portsmouth have now also had a bid accepted for the player.
Speaking after his side had lost 2-1 to Barnsley in the Carling Cup, Rodgers said: "Tommy had a medical at Reading yesterday which he passed easily. We had agreed a fee with Watford and personal terms with Tommy.
"He was on his way to the club to sign the forms when he was told that Watford had accepted a higher offer from Portsmouth. I respect his decision to take stock by talking to them. He has turned down moves to other clubs because he wants to come here.
"His agent is away at the moment so communication is difficult. It happened late in the afternoon and I had to concentrate on this game, so we will see what tomorrow brings."
Barnsley manager Simon Davey was delighted that his side ended their losing streak after snatching victory in a dramatic finish.
Daniel Bogdanovic had given Barnsley a 57th-minute lead. A tackle by Reading defender Julian Kelly saw the ball spring free into the striker's path and he calmly sent his shot past Reading goalkeeper Ben Hamer.
With Steele in superb form, twice denying Reading substitute Noel Hunt, it looked like Barnsley were going to hang on for the win.
But with a minute to go Tykes defender Rob Kozluk attempted to head the ball back to Steele only to see it go past his own goalkeeper and into the net.
Extra-time seemed likely but when Reading skipper Alex Pearce tangled with Kayode Odejayi in injury time referee Graham Horwood pointed to the penalty spot and Bogdanovic scored the goal that put Barnsley through.
"There was no doubt in my mind who was going to take the penalty," said Davey.
"He had to fly back to Malta this week to see his mother who was having an operation after a heart attack. He had to sign the forms for it to happen.
"When he came back we assessed his frame of mind but he was keen to play so we let him.
"It's an important win because it ends that run of three defeats. When that equaliser went in I thought 'here we go, that's Simon Davey's luck again' but that game was all about the mad, mad world of football.
"Hugo Colace came back into the group after injury and did well and Luke Potter at centre-back was magnificent. Our goalkeeper Luke Steele was also excellent.
"We meet Reading again in the Championship on Saturday but both sides will make changes and tonight may not have a great deal of bearing on the result of that game."