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Arsenal could suffer a huge setback in its attempts to sign Alexandre Lacazette, according to the Telegraph.
The Gunner have been working on a deal to sign the French striker but could be frustrated by his club’s demands.
Arsenal have already had a £29.5m bid rejected and are understood to be preparing a new bid worth £35m.
Lyon are reluctant to sell the striker and are prepared to reject Arsenal’s new bid. The French club have now decided to offer the player a new contract to end Arsenal’s hope of signing him.
The report also added Lyon will put a €70m price tag on the player which all interested clubs will have to match in order to sign the striker.
Lyon’s boss Bruno Genosio recently ruled out the sale of the striker but also admitted there is a small chance the striker could leave if they receive a fee too good to turn down.
He said: “My desire as manager is that the best players stay and Lacazette is very important for the team.
“I have been assured by my president that we will keep the player. You never know what could happen right up until the 31st August.”
Wenger would likely be put off by Lyon’s demand and will drop his interest in the striker should they not change their stand.
The club could now turn its attention to other targets with Manchester City’s Wilfred Bony believed to be on the club’s short list.