BBC Sport is reporting that Southampton have rejected a formal £12m offer from Arsenal for Theo Walcott.
It is understood Chelsea could be willing to pay up to £15m, but the 16-year-old has apparently made it clear he would prefer a move to the Gunners.
Southampton are reported to be interested in a deal in which Walcott would be signed by Arsenal and then immediately loaned back to them for the rest of the season.
Walcott has a pre-contract agreement with the Saints to sign a professional contract on his 17th birthday in March.
Not seen Theo Walcott play? There’s a good video file of him in action here (28mb).
Arsenal complete Walcott transfer · Update
Arsenal have completed the signing of Theo Walcott after the Southampton striker agreed terms and passed a medical.