Guedes is currently on loan at Valencia and the Spanish club reportedly offered €40m to sign the 21 year old permanently. PSG however turned down the proposal, and believe they can double the €35m they paid Benfica for the attacking midfielder last January.
Such a price will likely take Valencia out of the running, leaving the Gunners in a battle with United and Real for his signature. Whether he is worth the amount, it is debatable. Guedes has scored four goals and provided seven assists in 19 games this campaign.
Arsenal were scouting the Portuguese starlet even before his move to PSG, and he is said to be long term target for manager Arsene Wenger, so a bid for the player cannot be ruled out.