Ilkay Gundogan has rejected a new contract offer from Manchester City.

With his deal running down, the midfielder has held talks with Barcelona about a Bosman move. However, the Germany international favours staying with City.

But BILD says Gundogan has rejected City's contract offer as he is seeking longer than a 12 month extension.

And watching deveopments are Arsenal.

Gunners manager Mikel Arteta knows Gundogan well from his time at City and is keen to bring him to the Emirates.

With Granit Xhaka a step away from signing for Bayer Leverkusen, Gundogan would arrive to replace the Swiss - both on and off the pitch.