Smith said: "We have approached Wednesday but that hasn't progressed any further."
The 28-year-old Italian striker is out of favour at the Premiership's bottom club after several arguments with the Owls manager, Danny Wilson. He was fined two weeks' wages last month after walking out of The Dell after being told he would only be on the bench for the game with Southampton.
The Watford manager, Graham Taylor, has tabled an pounds 800,000 bid for Sheffield United's Brazilian striker Marcelo. Taylor faces a player crisis as Allan Smart will be out of action for a couple of months with knee ligament damage. Marcelo is also wanted by Aberdeen and Wolves.
Marcelo becomes a free agent at the end of the season and is talking about a move to Portugal. His wage demands may be higher than Watford's pay levels but a compromise is likely.
The Norwich City manager, Bruce Rioch, is trying to take his old Arsenal midfielder Stephen Hughes on loan to boost his injury-hit squad.
Hughes, who is free to move after ending his three-month loan spell at Fulham, would prefer a permanent move but could use Norwich as a shop window.
The Middlesbrough striker Andy Campbell is a pounds 1m target for the Huddersfield manager, Steve Bruce, who has asked his old friend Bryan Robson to let him have the player on loan with a view to a permanent signing. Campbell held down a place in the Boro side earlier this season but his chances have worsened with the arrival of Juninho.
If Bruce gets his wish it could clear the way for an auction involving Town striker Marcus Stewart. Both Everton and Celtic have shown interest in the prolific Stewart, who has already scored seven goals this season.Reuse content