The Gunners have turned their attention to the coveted centre-back, who has also attracted interest from Liverpool, with sources saying a deal is "close" to completionEXCLUSIVE
By Wayne Veysey | Chief correspondent
Arsenal have stepped up their interest in the 24-year-old centre-half after growing increasingly frustrated with their moves to capture Gary Cahill and Phil Jagielka.
The Gunners are believed to have told Birmingham they will pay £6 million for Dann, who has regained fitness after missing the second half of last season through injury but was an unused substitute in the club’s Championship opener against Derby County last weekend.
However, the Midlands club are holding out for £10m for the centre-back, who has also attracted interest from Liverpool, Stoke City and Sunderland this summer.
Arsenal are confident they have moved into the driving seat for Dann’s signature and sources close to the negotiations believe the Londoners are “close” to agreeing a deal.
Birmingham’s well-documented financial problems have convinced Arsenal they can buy the defender for below the asking price that has been quoted to suitors this summer.
The player wants to return to the Premier League and is attracted by the possibility of testing himself in the Champions League, while Arsenal are in the market for a centre-half with top-flight experience.
Nevertheless, even if Wenger can bolster a central defence that he has admitted needs reinforcing, the Frenchman has not given up hope of signing a second senior centre-back - either Cahill or Jagielka - before the transfer window deadline.
He has been frustrated in his pursuit of the Bolton Wanderers and Everton defenders but Arsenal have maintained dialogue with the two clubs.
The versatile Thomas Vermaelen, who has had a full pre-season after missing the last campaign through injury, is likely to be shifted to left-back should Arsenal complete deals for two defenders in the next three weeks.