yea as if kaka would be worth 120m and fabregas 'only' 40. There's no way fabregas will move an inch closer to milan for that sum if arsenal know that milan have funds of 100m+ at their disposal. Imo farbegas's market value is damn near to kaka's.
That said, i'll not believe milan will get those 120m for one player. ~70m sounds 'possible' (i'm avoiding speaking of 'reasonable' here)
But with all the fuzz going on, i highly doubt milan will be able to find a worthy replacement for kaka. sure they'll throw themselves at people like benzema or so, but the only possible replacement for the kaka-position would be bremen's diego imo... and i doubt diego can do what kaka does, or did. (not speaking of this year's kaka...)
All in all i think milan are making more bad than good with this move, no matter how much they'll get. Because i could imagine the milan fans going nuts some time if they keep doing these sorts of things. and if the fans don't fall for the marketing strategy of milan anymore, they're doomed...