Arsene Wenger has refused to meet Schalke's £37m asking price for Julian Draxler, despite the board's willingness to spend, reports the Daily Mirror.
Arsenal officials have been holding discussions with the Bundesliga outfit all week but have still failed to convince them to lower the asking price for one of Europe's hottest properties. As well as wanted £37m, Schalke also want most of the cash paid upfront.
The board are willing to back Wenger in his pursuit of Draxler but the man himself doesn't believe £37m represents value for money meaning a deal before the 11pm deadline today is looking unlikely.
If Schalke agree to a proposal on the region of £30m, Wenger could still turn it around but the Gunners boss has started to concentrate on other targets.
Waiting to the summer to resume talks for Draxler is a risk as Real Madrid and Manchester City are both ready to rival Arsenal should he remain available when the current season finishes.
Wenger is looking at other options for an emergency loan deal including Miroslav Klose, Alvaro Morata and Cristian Tello.
Meanwhile Arsenal sources claim that they were never interested in Mirko Vucinic and were offered the chance to sign Dimitar Berbatov.