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According to Spanish radio station Cadena SER claims the Gunners have had their £23.4m bid snubbed for Saul Niguez.
The midfielder was reportedly close to completing a move to the Premier League in the winter transfer window after failing to retain a regular first team spot at Atletico Madrid but an injury to Tiago forced the Spanish club to block his exit.
Arsenal have identified Saul as a potential summer transfer target as Wenger prepares to overhaul his midfield this summer.
Manchester United are also interested in signing the striker but it is Spurs who currently lead the race to sign the Spanish international.
Atletico Madrid wants to sign the midfielder on a new deal in order to increase the release clause in his current deal but should the Spanish club be forced into selling the player, they are not prepared to do so for less than his €45m release clause, according to the report.
Saul has been impressive for Atletico this season and could be rewarded with a place in Del Bosque’s squad travelling to France for the Euro Championships this summer.