They would probably replace older Egyptian aircraft and not the F-16s IMHO, if such a deal is made.
As to the US relations... it's hard to blame the Egyptians. after the Obama Administration's fiasco of avidly supporting the Muslim Bortherhood in Egypt. The military, the securlar muslims in Egypt, and the non-musilm population, including the large Coptic christian population in Egypt all were aghast at that support and ultimately overthrew the Muslim Bortherhood to get rid of their much more radical ways.
The Obama administration has never really stepped back from their support of the Muslim Brotherhood, and the Egyptians have once again named them a terror group and are hunting down their leaders.
So, the Egyptians are not anxious at all to jump on the Obama band wagon. As a result, they are tendering other offers.
This is a terrible consequence (among many) of Obama's "leading from behind," and his afinity for organizations like the Muslim Brotherhood. Disasterous US foreign policy under this man IMHO.