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Football London
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Sam Hill

Mikel Arteta handed huge Arsenal transfer blow as Nicolas Pepe decision made after Nice loan

Mikel Arteta has been handed a huge transfer blow with OGC Nice opting against signing Arsenal loanee Nicolas Pepe on a permanent deal. The Ivorian winger spent the 2022/23 campaign on-loan in France - scoring eight goals and providing just one assist in 28 appearances.

The Gunners signed Pepe from Lille for a £72million fee back in 2019 but he has failed to repay that investment on the pitch and looks set to be sold this summer when he returns to the Emirates Stadium. Pepe meanwhile is no longer a part of Arteta's plans after being bombed out of the squad towards the end of the 2021/22 season.

The Ivorian has just one year left on his current contract, and although Arsenal are keen to garner a fee for him, football.london understands plans have been made for the termination of his contract if required. The arrival of Leandro Trossard in January will prove to be a replacement for the 28-year-old winger whilst the Gunners are looking to add another versatile forward to their squad this summer.

The focus for now remains on securing a deal to sign West Ham captain Declan Rice after the England international lifted the Europa Conference League trophy earlier this week. Arsenal are hoping to move quickly and sign Rice before their pre-season training begins this summer.

Moises Caicedo is another target for Arsenal as they look to revamp their midfield options. Granit Xhaka is expected to join Pepe in leaving the Emirates Stadium as the Swiss midfielder edges closer to sealing a return to Germany.

Bayer Leverkusen are in advanced talks over a £13million deal to sign Xhaka following an impressive season with Arsenal, football.london understands. Kieran Tierney is another player that could leave the club with Oleksandr Zinchenko now firmly placed as Arteta's No.1 left-back.

READ MORE: Arsenal news and transfers LIVE: Declan Rice 'agrees terms', Caicedo £75m bid, Kai Havertz swoop

The Gunners will be hoping to receive a transfer fee for Pepe's exit but if no interested parties are willing to meet his valuation - Arsenal may terminate his contract to get him off their books. Arteta will hope he can raise a significant amount of funds to reinvest in key areas of the squad ahead of a return to the Champions League next term.

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