Walcott was in dispute over a new deal with the player wanting to be played as a centre forward by Arsene Wenger.
The news may prompt Wenger to become active again in the transfer market.
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Who of Europe’s top strikers will move to England this summer?
After a dreadful start to their Bundesliga campaign, Borussia Dortmund appear to have weathered the storm after going five matches without defeat.