Davies joined the Reds in February 2020 from Preston North End but is yet to play a single minute of football under Jurgen Klopp.
The centre-back spent last season out on loan at Sheffield United and Liverpool are looking to offload him on a permanent basis this summer.
Davies has attracted interest from the Championship with Stoke City, Middlesbrough and Blackburn keen on him.
The Riversiders are locked in talks with the Reds over a deal for the defender but are yet to table a bid for him.
And Blackburn could have to deal with some major hurdles to get a deal over the line for Davies as they cannot accommodate him into their wage structure on what he is currently earning at Anfield.
Davies would have to be willing to forego a significant portion of his current wages for Blackburn to sign him.
The defender prefers to leave Liverpool permanently but he will have to find a compromise on wages should he want to join Blackburn.
But Davies is not short of suitors at present as it stands and it remains to be seen where he ends up playing.
