Manchester City wanted the Algerian as a backup option
In January 2018 Injuries to Leroy Sane and David Silva forced Guardiola to survey the transfer market. There was also ‘magician’ Kevin De Bruyne’s fatigue. He was given leave to travel abroad for a rest.
These are huge factors in City’s interest in Mahrez. Allegedly City eventually tabled a £50 million-plus-player deal on January 31. The player’s identity is not certain. Leicester then reportedly turned the offer down, asking for more money in a cash-only deal.
Manchester City then stated they were no longer interested in Mahrez. Presumably managers like Guardiola, Jose Mourinho or Antonio Conte would be horrendously repelled from interest in a player who could repeat this behaviour. The behaviour in reference: technically going AWOL (Absent Without Official Leave) twice.
I believe The league leaders required Mahrez as a back-up to the aforementioned players. Not to mention backup for Raheem Sterling and Bernardo Silva. As Champions elect and almost certain Champions League semi-finalists, City have depth and a set starting line-up.