Arsenal face a battle to avoid losing out to Napoli on another major summer transfer target as the two clubs move to sign Luiz Gustavo.

Standard Sport understands Bayern Munich are demanding around £17million for the 26-year-old and are relaxed about his possible destination with a variety of clubs from across Europe having registered an interest.

Gunners boss Arsene Wenger is keen on bolstering his midfield to ease the burden on Mikel Arteta, who is the team’s only established defensive midfielder.

The fee is not viewed as prohibitive — although Arsenal are believed to value him at closer to £14m — and Bayern are allowing clubs to negotiate with the Brazilian’s representatives over personal terms as he looks to improve on his £60,000-a-week wage.

Bayern have confirmed that “Luiz has offers from England, Spain, Russia and Germany” before adding “the player has not made a decision, yet”.

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But reports in Italy this morning suggest Napoli have entered the race for Gustavo, a development which has ominous overtones for Arsenal after their failure to sign Gonzalo Higuain from Real Madrid earlier this summer.

The Gunners had agreed personal terms with Higuain and believed they had a verbal agreement with Real over a £23m fee only for the Spanish club to increase his valuation to a level Napoli were prepared to match. The Italians ended up paying £31m.

Given Bayern’s willingness to sell — Gustavo sat out their opening Bundesliga match against Borussia Monchengladbach on Friday and has slipped down the pecking order after the arrival of Thiago Alcantara from Barcelona — a bidding war is unlikely.

Personal terms are therefore expected to be the determining factor with talks set to continue this week. Napoli have one key advantage given they can offer the guarantee of Champions League football while Arsenal face a tricky two-legged play-off against Fenerbahce.

Arsenal have at least £70m to spend but have so far been frustrated in their efforts to make a statement in the transfer market.