I'd take him on loan for a year. We're going to need a few Valencia-type signings with about 60 games to come this season. We can't be buying 6-8 first team-ready players in one window, you wouldn't have thought.
On loan, absolutely. That'd be perfect, especially with an option to buy at a set price.
In terms of throwing 20 mil at City though for a player who has hardly played...I think that'd be an unnecessary risk. I think if he continues to sit on City's bench (let's face it he isn't getting in ahead of Jesus) then I think that'd speak volumes about a player who isn't confident enough in himself to make the jump up to being a regular PL player, or possibly is just happy to collect a big paycheck. One way or another he should be getting out of there this summer.
If we want him though, I don't think we should be throwing silly money around as City have no strong reason to keep him (in the short term at least) so we'd have a pretty decent bargaining position.