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Gillingham have lost out to League 1 rivals Southend in their pursuit of striker Scott Vernon.
Gills manager Mark Stimson was hopeful of signing the Colchester player on a permanent deal in time for Saturday’s home clash with Walsall.
Vernon though has instead opted to join Southend on loan until the end of the season.
He said: “I had other offers but I live in Colchester and Southend were the most local club.”
Vernon initially joined the Gills on loan in October but injury forced him off the field in his debut against MK Dons with just 41 minutes played and he subsequently returned to Colchester for rehabilitation.
Upon recovery Stimson made him a number one transfer target but must now look elsewhere for fresh firepower.