Arsenal have made the signing of Wolves winger Pedro Neto a transfer priority this month, according to reports.
The Gunners are keen on bringing the 22-year-old to the Emirates but must offload club-record signing Nicolas Pepe in order to facilitate the move.
Mikel Arteta's side are in negotiations with Ligue 1 side Nice over a potential loan deal for Pepe, which would give the green light for the Neto deal.
Arsenal have been in month-long discussions with agent Jorge Mendes over the Portugal international, per The Athletic.