Lyon are reportedly edging closer to signing a potential replacement for Houssem Aouar.
The Gunners are desperate to add a creative central midfielder before the summer transfer window closes next week, with Aouar the club's number one target.
An opening bid for the Lyon captain was rejected, but football.london understands Arsenal are preparing a second offer of £36.5million (€40million) with a further £9million in potential add-ons (€10million).
Club president Jean-Michel Aulas revealed that that an offer of £32million (€35million) had been turned down but it is thought Arsenal will not be deterred.
"There was a timid offer," Lyon president Aulas told Canal Plus after his club’s 1-1 draw with Lorient on Sunday.
"We felt like either they didn’t consider the fact that this is a player in the French national team. So it was not an offer that was even susceptible to making us consider a sale."
When asked whether Lyon were looking for €40million or €50million for Aouar, Aulas responded: "It is certainly more than the first number that you mentioned."
Despite Aulas' admission that a bid had been rejected, Lyon are reportedly closing on a deal for AC Milan midfielder Lucas Paqueta, as the Ligue 1 side seemingly prepare for Aouar's possible switch to north London.
According to Sky in Italy reporter Fabrizio Romano, Lyon have reached an agreement with Milan and a deal is 'almost done'. Romano also claims that Arsenal have promised Aouar's agent that they are still negotiating a deal and will try to get him.
Paqueta joined Milan in 2019 after impressing at Flamengo with 10 goals in 32 league appearances in final season.
But the Brazilian international has struggled for regular game time at the San Siro, and Lyon could hand him a lifeline, as they look to replace Aouar.
Taking to social media, Arsenal supporters believe the imminent arrival of Paqueta could signal Aouar's departure to north London.
On the pitch, Arsenal's winning start to the season was ended by champions Liverpool after a 3-1 victory for the Reds at Anfield on Monday night.
Goals from Sadio Mane, Andy Robertson and Diogo Jota sealed the win for Jurgen Klopp's side.
Speaking after the game, Gunners boss Mikel Arteta was asked about whether his side would be adding additional players before the window shuts.
"Well we are trying to improve the team," Arteta told Sky Sports. "There's a week to go, there's a lot of things happening in and out.
"We don't have any news on new players and either with players that might leave the football club.
"It's a week to go, I think it's going to be really busy for other clubs because not much business has been done. Let's see what happens."
