Arsenal were hoping for a big-money deal involving a winger, which has now appeared to collapse.
Gunners boss Mikel Arteta has stressed that the summer isn't over in terms of transfers, despite spending around £200m on the likes of Declan Rice, Jurrien Timber and Kai Havertz. Arsenal would still like another midfielder and a right-winger to compete with Bukayo Saka.
Sales are now critical in order to boost transfer funds, however, with Arteta looking to shift a number of fringe stars in order to increase his ability to spend.
According to James Benge of CBS Sports, a move for Nicolas Pepe to go to Saudi Arabia is now off – meaning the winger will now have to find an alternative exit.
"The Ivory Coast international had been offered a package that included a €5m net salary in addition to significant bonuses but the club have now moved on to other targets," Benge writes.
Pepe joined Arsenal for £72m in 2019 under Unai Emery but has failed to light the Premier League up under successive managers and spent last season on loan at Nice, where he struggled to make a big impact upon his return to Ligue 1.
It was even suggested by The Athletic journalist James McNicholas's Gunnerblog YouTube channel that the north Londoners could even terminate Pepe's contract, just to get the wages off the books.
Though the Gunners are in the market for competition in Pepe's position, it's not thought that the Ivorian is even an option anymore for Arteta, given that he hasn't travelled with the squad on preseason in America.
Pepe is valued at €18m by Transfermarkt.
More Arsenal stories
Arsenal transfer news is ramping up this summer, with the Gunners spending £200m early in the window.
The Gunners could be targeting two more Manchester City players, according to reports. Xavi Simons is on the radar and Ivan Fresneda could join, though Arsenal could sell £100m worth of players, too. Romeo Lavia is in the crosshairs – though Liverpool want him, too. Takehiro Tomiyasu is set for an "intriguing switch", while Moises Caicedo looks Chelsea-bound.
Arsenal are believed to want another right-winger, while Gabri Veiga favours Arsenal over Spurs.
