Manchester United had a £20million bid rejected last week for Morgan Schneiderlin, The Telegraph reports.
And this is around £5m short of Southampton's valuation for the player.
Schneiderlin is still expected to join Old Trafford this summer.
Gunners were also in the race to sign the ‘midfield destroyer', but appear to have pulled out after discovering the France international’s wage demands.
READ MORE
Carrick is frontrunner for interim Man Utd job: reports
'Fragile' Man Utd hit new low with FA Cup exit
