Manchester City end Declan Rice Race as Arsenal have reportedly submitted an improved bid worth up to £105m for West Ham United captain.
The Gunners saw two offers for the England international rejected by West Ham, the first of which was worth £75million, with an additional £15million in add-ons.
City then officially entered the race on Monday night with a bid of their own, which was also turned down by the Hammers.
On Tuesday evening, the north London outfit upped the stakes, submitting a club record bid worth £100million plus an additional £5million in add-ons, sportdaylight understands.
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That offer is said to have resulted in City pulling out of the race for the 24-year-old, a major boost to Mikel Arteta and Arsenal as they try to secure their number one target.
Mateo Kovacic joined City in a £25m deal from Chelsea on Tuesday and the Croatia international will go some way to replacing Gundogan.
However, City could now enter the race to sign Chelsea and Manchester United target Moises Caicedo from Brighton.
Should Rice join Arsenal, it will be a personal triumphant for Mikel Arteta.
The Spaniard has laid out significant groundwork towards signing Rice and made a personal effort during the course of last season to speak to the midfielder over a role at the Emirates.
City’s financial might and greater guarantee of success threatened Arsenal’s early move but the Gunners are now favourites to sign the West Ham captain.