Kanu says the timing - being on deadline day - prevented him from having a quiet word in Iwobi's ear, begging him to stay.
The former striker told Goal: “It was a surprise to everybody because it happened right at the end of the window.
“If I knew earlier, I could have said to him not to go and that it was better for him to stay.
“I would have said that there was no need for him to go because at Arsenal he will still play. He's that good and he needs to know that.
“I think Arsenal would have been the best place for him because it's a big club and you want to play in a big club and in Europe. Those are the games you want to play."