Nevertheless, the Lille forward is due to undergo a medical in London before the end of this week, with the official announcement of his signing expected shortly after.
"The transfer window is so long".
The second source said PSG were also interested in the Paris-born forward but their approach may have come too late and could also be hampered by their need to trim costs to satisfy Uefa's financial fair play rules.
Pierre-Emerick Aubameyang and Alexandre Lacazette scored 50 aims amongst them past year and Pepe will insert to supervisor Unai Emery's firepower.
What this means for the future of Iwobi, Mesut Ozil and Henrikh Mkhitaryan remains to be seen.
Arsenal duo Granit Xhaka and Emile Smith-Rowe have also fuelled speculation the former Angers winger is set to arrive by liking a photographed picture showing Pepe in an Arsenal shirt on Instagram. In addition, signing highly-rated teenage center back William Saliba from Saint-Etienne for $33 million then loaning him back for this season is another positive move.
Koscielny could not help Arsenal to Europa League success as they lost last year's final to Chelsea. The Gunners let in 51 goals last season in the league, more than double of what champions Manchester City (23 goals) conceded.
They claim Pepe told Ancelotti that he was ready to move to Italy, but Azzurri owner Aurelio De Laurentiis was unwilling to meet Lille's valuation of him.
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