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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The start of the 2017-18 Premier League season is just around the corner and is shaping up to be one of the most competitive yet.
As always it is the so called “big clubs” that have splashed the most cash in the transfer window so far this summer. Manchester United or City? Arsenal or Tottenham? Who are the winners and losers of the transfer window so far?