The Gunners face the prospect of missing out on another top summer target despite being confident of sealing a 20 million-euro deal for the Brazil internationalWolfsburg sporting director Klaus Allofs has denied that the club has completed a deal for Arsenal target Luiz Gustavo.
The Gunners have been looking to seal a 20 million-euro deal for the out-of-favor Bayern midfielder as Arsene Wenger hopes to add to the solitary summer arrival of Yaya Sanogo.
Despite strong interest from the Premier League side, Wolfsburg is hopeful of attracting Gustavo to the Volkswagen Arena, although Allofs is adamant there is no deal in place just yet.
He told reporters: "The chances are good but the deal is not done. To report that is just false."
Wolfsburg coach Dieter Hecking had earlier spoke of his optimism that a deal could be agreed for the Brazil international.
He told SID: "We can't confirm the transfer yet. He has been with the Selecao, so we haven't had more talks.
"But we hope he will decide for Wolfsburg. Of course we know there are several other clubs interested."
Martin Winterkorn, CEO of the VW Group which owns Wolfsburg, put pressure on Hecking after he urged the side which finished 11th in Germany's top flight last season to sign the 26-year-old midfielder back in July.
Having already missed out on Gonzalo Higuain, who joined Napoli earlier in the transfer window, and with Liverpool adamant it will not allow Luis Suarez to leave for the Emirates Stadium, Wenger faces the prospect of missing out on another top target ahead of the start of the 2013-14 campaign.