Aouar has been identified as a top target by Mikel Arteta, who wants to take the Arsenal midfield to the next level this season.
Arsenal made a verbal approach earlier in the window when they offered cash plus Matteo Guendouzi, but Lyon wasted little time in rejecting the offer from the Gunners.
But the north London club remain intent on taking the Frenchman to the Emirates and are looking to push the limits to get a deal over the line.
And according to French magazine Le 10 Sport, the Gunners are now working to come back to Lyon with an improved bid for Aouar in the coming days.
The Arsenal board want to push the boat out to land Arteta’s top target and are aware of the young midfielder’s quality.
They will soon table an improved bid but are also mindful of not overpaying by being drawn into a bidding war for Aouar.
Arsenal will face stiff competition from some of the biggest clubs in Europe for the Frenchman’s signature.
Manchester City, Paris Saint-Germain and Juventus are also interested and Lyon are believed to be holding out for €60m.
