Transfer news: Arsenal weigh up possible moves for Alvaro Morata and Mirko Vucinic after Julian Draxler deal falters

The Gunners are still hopeful of making a loan signing on the final day of the window to act as cover for French striker Olivier Giroud

Arsenal's hopes of signing the Schalke midfielder Julian Draxler were fading last night as the two clubs found themselves too far apart on a transfer fee for the young Germany international.

The interest in Draxler, 20, has been genuine with discussions taking place between the clubs. But Schalke stuck to their valuation of €45 million (£37m), which has been too high for Arsenal when they consider that they would be taking a considerable risk on the potential of the player.

Arsenal are still hopeful of making a loan signing on the final day of the window to act as cover for their French striker Olivier Giroud.

Alvaro Morata of Real Madrid and Juventus' Mirko Vucinic have been considered as loan or permanent deals in this window but both those options now look unlikely.

The Schalke sporting director Horst Heldt said that he believed Draxler would not leave in this transfer window. "We are happy to have such a world-class player in our squad," he said. "I am very convinced that Draxler will be playing for us in the second half of the season and also probably beyond that. We are not interested in letting Julian go, and he has also not approached us about a transfer."

Heldt said he had not spoken in person to an Arsenal delegation, joking: "I checked my office to see if someone was waiting for me, but nobody was there.

"Of course, there are always other clubs interested in him, and should someone make a serious offer for him, then we as a club have to seriously consider that. That does not only apply to Julian Draxler, but to every other player."

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