French publication L’Equipe had reported earlier this week that Valencia had agreed a €35million (£31m) deal to sign the Portuguese international after his loan spell ends at the Spanish club in the summer. AS have however been told by sources at Valencia that no such deal is in place. The La Liga side could only afford to buy the midfielder if they qualify for the Champions League. They currently sit third in the league table.
The Gunners had been looking at Guedes when the player was still at Benfica, but a report in the Daily Mail earlier this month suggested that the London club were keen to revive a move for the 21 year old.
The Portuguese winger has been in excellent form for Valencia since his loan switch to the Mestalla, having scored three goals and provided five assists in just 12 league games.