The 28-year-old winger opted to join Oxford United from Birmingham City, for a fee understood to be close to £800,000, breaking United’s club transfer record.
Dembele was chased by the Swans too, with reported interest also from Blackburn Rovers.
The wide player will be injured for tomorrow’s clash between the U’s and the Swans at Grenoble Road, but if things had panned out differently, he could’ve been playing for the visitors.
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Williams told WalesOnline: “We weren’t able to reach a deal. I think he is a very good player, a very accomplished player.
“I can’t tell you what they offered him because I don’t know. Maybe the player just preferred the club or the manager.
“I don’t know exactly what the reason was. But I know we were not in the running in the end.”
He added: “I think it’s a very well-run club and a very ambitious club. They are trying to go about their business in a very organised way and when they set their targets, they go after them in a very aggressive way.
“They are a good example of a club being well-run and coping with the step up in level very well.”