The former NSL side tonight confirmed they have been in talks with Melbourne Heart to take over the club from the current ownership.

In a statement released this evening, South Melbourne said they had offered more than $3.5 million to buy the club and 100 percent of the FFA-controlled licence.

They added that the offer was made after several discussions between Heart and SMFC's directors.

And they sensationally revealed the had already been in touch with Brazilian star Emerson to be the new coach of the club, replacing current coach John Aloisi.

World Cup star Emerson, 37 - who played against Aloisi at Germany 2006 - currently runs a football academy in Brazil after a top flight career with Real Madrid and Juventus.

Fellow Brazilian Emerson, 41, retired from playing in 2008, ending up in the Rio de Janiero state league after winding down his professional career in Greece.

Since then, he has been keeping a low profile and any position at Heart would be his first significant role since retiring.

South Melbourne have so far not responded to questions about which one they are in talks with, although they have had links with the former World Cup star.

The revelation came after Heart CEO Scott Munn angrily hit back at claims the club was in strife and close to agreeing a deal.

He snapped back that the club had twice been approached by SMFC about a buyout and both times the overtures had been rejected.

Heart later added that they expected to make a small profit at the end of this financial year.