The attacking midfielder has been cast out of the Watford squad.
McGugan spent a seven-game loan spell with the Owls earlier this term, but the 26-year-old returned to Vicarage Road at the beginning of January at the end of the deal.
Although head coach Stuart Gray was keen to extend the former Nottingham Forest man’s loan - as per the Sheffield Star - nothing was agreed, but McGugan’s future in Hertfordshire is looking bleak. Having been cast out of the first-team squad by Hornets head coach Slavisa Jokanovic, the midfielder has not made an appearance for the play-off contenders since the beginning of November, and the club are actively looking to see him moved out this month.
Following the signing of Ben Watson from Wigan, who plays in the same midfield position as McGugan, he is even further out the first-team fold at Watford, and Gray has once again outlined his desire to see the former Forest man back at Hillsborough.
“Lewis is a top midfielder who has got 40 plus goals in his career,” the boss told the Sheffield Star. “He came here and we had to get him match fit so we probably didn’t see the best of him until the end of his loan period.
“We wanted to extend it and Lewis was keen to stay but Watford didn’t allow it.
“Watford have brought in Ben Watson from Wigan so that might allow us to bring in Lewis. I am always interested in bringing in players who are better than the ones we have got.
“If there is a chance, I will keep plugging away.”
With Watford looking to sign another midfielder before the end of the window - as per the Watford Observer - a deal for McGugan will likely be completed when the Hornets finalise their own transfer business.