Seems reasonable to me. I haven't seen enough of him to know definitively, but any player, at his age, arriving from an inferior league will have a bit to prove, so spending that sort of fee would be a massive risk. If we genuinely don't think he's worth that then walking away is the right thing to do in the long term.
The more odd aspect is that we have seen other clubs negotiate for the player and, in fact there are stories that we were in for him last summer, so we should really have some sense of how much give there is in the fee. If we get him for £10m less, or whatever, then job done, but if we end up spending a couple of weeks chasing a guy, similar to Maguire, whose price never changes, only to walk away because we couldn't get the price down, then it doesn't seem a great use of our time.