Liverpool have emerged as candidates to hijack Tottenham Hotspur's bid for the 21-year-old, but Spurs may yet have an ace up their sleeve which could allow them to beat the Reds in the race for Davies' signature.
Swansea Chairman Huw Jenkins revealed this morning that contact has been made between the two clubs regarding a possible exchange deal, which would involve Tottenham midfielder Gylfi Sigurdsson going the other way.
Sigurdsson is still a firm favourite among Swansea City fans following a fruitful loan spell at the Liberty Stadium in 2012.
The Icelandic international scored seven goals in 18 appearances for the Welsh side, before completing a permanent move to Spurs from 1899 Hoffenheim the following season.
The lure of Sigurdsson could make things difficult for Liverpool, and may potentially dispel any hopes the Merseyside club had of landing Davies.
Swans boss Garry Monk played alongside Sigurdsson while the midfielder was on loan at the Liberty Stadium, and could be keen on working with the 24-year-old again.
Should Monk make it clear to the Swansea hierarchy that he is only willing to sell Davies in exchange for his former team-mate, Liverpool will effectively be shut out of any possible deal and will alternatively have to stump up a handsome offer to have any chance of landing the defender.
Of course any possible switch between Tottenham and Swansea will all hinge on Sigurdsson's willingness to leave White Hart Line.
The Icelandic international made 25 league appearances for Spurs last season and scored five times, but with a new manager in town and competition for midfield places high, a Swans return could be a tempting offer for the midfielder.