by Ken Rosenthal

Both teams continued to target Peavy as the general managers' meetings concluded Thursday, and the Padres' discussions with the Cubs could be expanded to include a third team, according to major-league sources.

The Braves' package includes shortstop Yunel Escobar, either left-hander Jo-Jo Reyes or right-hander Charlie Morton and a third player, believed to be a top prospect, sources said.

The details of the Cubs' proposal are not known and likely are fluid. The Padres could spin one or more of the players they would receive from the Cubs to get additional pieces from another team, sources said.

The Braves' edge over the Cubs is that Escobar already is an established major leaguer, while Reyes or Morton also could help the Padres next season. The Cubs' better young players are in the lower minors.

If the Cubs acquired Peavy, their rotation immediately would be considered one of the game's best, particularly if they also re-signed free-agent right-hander Ryan Dempster to go with righties Carlos Zambrano and Rich Harden and left-hander Ted Lilly.

The team is willing to give Dempster a four-year contract, sources say, a decision that improves their chances of retaining the pitcher, who was 17-6 with a 2.96 ERA in his return to the rotation last season.

Dempster, 31, almost certainly will want a deal in excess of the four-year, $48 million contract that the Mariners awarded free-agent right-hander Carlos Silva last winter. In a thin market for starting pitching, another club likely would be agreeable to such terms.

The Cubs are for sale, but team officials apparently believe that they can absorb the four years and $63 million remaining on Peavy's contract while committing perhaps $50 million to Dempster over the same term.

If the Cubs acquired both pitchers, they might need to part with free-agent closer Kerry Wood, reduce their payroll by trading right-hander Jason Marquis and pursue a more inexpensive left-handed hitting outfielder than they previously planned.

The Padres are seeking young pitching in any deal for Peavy, who has a full no-trade clause but has informed the club that he is willing to go one of five National League teams. The Yankees and Angels will become viable options only if the Padres fail to reach agreement with one of Peavy's preferred clubs, but such a scenario appears unlikely.

Peavy almost certainly would require some type of inducement to approve any deal. At minimum, he probably would ask for a full no-trade clause for the rest of his contract. He also could ask for a team to guarantee his $22 million option for 2013, or provide some other type of compensation. Padres general manager Kevin Towers said Wednesday that Peavy has established different criteria for different teams.