This value is decided by the Chairman of the club the player currently plays for. This value is dependent on his significance within the club. If the player is a 'first team' player or is one of the better players within the squad the Chairman will value him highly. Different Chairman will value the player at different amounts if the player moves club.
For example AC Milan's Chairman may value one of their 'reserve' players at £3m but if the player moved to Siena, Siena's Chairman may then value him at £5m as he would be more of a key player for them.
When placing a bid for a player you will have to at least match the Chairman's valuation for the bid to be completed if the offer is accepted by the manager.
However, on occasions your Chairman may not be willing to meet the valuation of the player so you will not be able to make a transfer offer for this player.