He'll probably end up at Sunderland. No offence meant at all but they're a much bigger club with a bigger 'name' as manager (although personally I think Moyes is inept). Both teams had or have plenty of his former team mates so he'll be making a very informed decision. Either way £12m is very reasonable given the money being chucked around this summer. If he can recapture his pre-injury form (suffered, ironically, against Sunderland last season), he's one of the best box to box mids in the league with an eye for threading a pass and a knack for timing runs into the danger zone perfectly.
If he does sign for you I wish him and Hull all the best and really hope you stay up - Daws, Thudd and Jake deserve it