Arsenal's deadline day attempts to sign Douglas Luiz appear to be over after Aston Villa rejected a third bid for the midfielder in the region of £25 million, sources have told ESPN.
With just over an hour of the window remaining, Arsenal had a third offer for the 24-year-old turned down after seeing previous bids of £20m and £23m rejected earlier on Thursday.
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Villa were adamant throughout negotiations that Luiz would not leave, despite the Brazil international having just one year remaining on his contract. Sources have told ESPN that Villa have not given up convincing Luiz to sign a new deal.
Arsenal are interested in Palmeiras' Danilo, but the Brazilian club are reluctant to let him leave at this point in the season, prompting them to look at other targets.
Luiz scored direct from a corner as Villa suffered a 2-1 defeat at Arsenal on Wednesday, after which boss Steven Gerrard was asked whether the Brazil international would stay at the club.
"There's more than two people that are in control of that, but I'm certainly not one of them," Gerrard said.
"That will be Douglas, that will be his agent and that will be what happens around that.
"I would like to keep him -- he's a fantastic player and I've made that abundantly clear. We are not in a position to lose top players.
"But at the same time, Douglas has got a year to go and it is one of those really touchy situations where the club has to do what is best for the club, not necessarily what is best for me."
