If there's an ultimatum it should probably be sign or we rescind the offer. Because right now no one seems to be offering him better options and there's no guarantee they will next summer so he should be thinking long and hard about turning his nose up at our offer.
Renewing his contract shouldn't be automatic from our perspective anyway, over 4 or 5 years with wages, a signing on fee and bonuses we could be looking at a 25-30m commitment to him. What value has be provided to justify that? What it his availability likely to be going forward? Do we want to keep a player who isn't wildly enthusiastic about being here?
The argument that we have to renew his contract is to preserve his value but what is his value? He's on the market and no one is biting, he has a number of downsides including his injury history, would we be committing a huge amount of money to preserve the value of a player whose value actually isn't all that high?
For me selling is clearly the best option if we find a buyer, but I'm not sure renewing him is actually better than letting his contract expire, maybe we'd miss out on a fee but maybe we'd swerve another Keane / Holgate scenario, committing to a massive contract for an underperforming player.
I'd rather see him next season playing for his future than begrudgingly accepting a fat contract that leaves him with little motivation to perform.