Shkodran Mustafi will remain at the club this summer according to Valencia manager Pako Ayestaran.
Arsene Wenger revealed he was hopeful of completing a deal for the 23-year-old after Saturday’s goalless draw with Leicester, but the clubs are yet to strike an agreement that satisfies all parties despite the Gunners settling personal terms with the player.
Mustafi’s manager has since delivered a blow to Wenger, who is pursuing defensive targets following long-term injuries to Per Mertesacker and Gabriel Paulista.
The Valencia boss said: “Mustafi is not for sale and he will stay at VCF. The market is open and there are still possibilities.”
The Germany international is Wenger’s primary target with just over a week to go in the summer transfer window.
He was named among the substitutes for Valencia’s La Liga opener on Monday evening, but couldn’t prevent a 4-2 defeat to Las Palmas despite being introduced in the second period.
Arsenal have identified Jose Fonte, Jonny Evans, Simon Kjaer and Omer Toprak as alternative targets should a move for Mustafi break down.
It comes after Alexandre Lacazette outlined his intention to remain at Lyon despite interest from Arsenal.
Wenger now looks increasingly unlikely to add to his forward line this summer after failed attempts to land Jamie Vardy, Gonzalo Higuain and Lacazette.
The latter, who Lyon insist will set Arsenal back £60million, said last week: “There will be no departure. Everything is going well here at OL.”