Gunners target also has Bundesliga suitors.
Arsenal have made a bid for Palermo striker Paulo Dybala, according to Argentine source Clarin, but Borussia Dortmund have made the Serie A side a higher offer.
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The Argentine has been one of the stand-out performers in the Italian top flight this season, showing himself to be one of the brightest prospects in European football at the moment.
Arsenal are known to be big admirers of the 21-year-old and have submitted a bid of around £31m to Palermo, though Dortmund are currently in the lead for the player as they have tabled an offer worth £37.5m.
Jurgen Klopp’s side are in dire need of new signings after a terrible first half of the season which sees them flirting with relegation after a shock run of poor results in the German top division.
It remains to be seen if Arsenal will up their offer, but the Gunners have shown they can spend big on players with recent signings of Mesut Ozil and Alexis Sanchez in the last couple of summers.
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