Gunners target will cost more than double the club’s £15m record transfer fee.
Arsenal’s hopes of signing Gonzalo Higuain have been dealt a blow after they were informed by Real Madrid that the striker will cost €40m (£37m), according to The Times.
The Gunners were confident of signing the forward for around £23m after informal discussions with the La Liga giants last month.
The north London outfit have already agreed personal terms with Higuain’s father Jorge but the deal has stalled because Real claim Arsenal are yet to make an official bid for the 25-year-old.
It is possible that Real have moved the goalposts after Serie A club Napoli entered the race for Higuain. The Italians have money to spend after selling Edinson Cavani to PSG for £54m and their president, Aurelio de Laurenttis, has perhaps unwisely boasted that the club have a €124.5m (£107m) summer transfer budget.
Napoli, however, are unlikely to pay Real’s new asking price for Higuain, while De Laurentiis has also claimed Chelsea are interested in the former River Plate striker.