Pedro Neto is flattered by Arsenal's interest but is happy with Wolves.
Neto stated, "I always enjoy hearing this sort of praise, but I'm focused on my work here because I'm feeling so good."
Arsenal wants to sign 22-year-old Neto, who is back to full fitness following a ten-month knee injury.
Arsenal, Chelsea, and Manchester United were all offered the chance to sign Neto and they want to initiate discussions with Wolves.
The Midlands club is said to demand £50 million for Neto, which may price Arsenal out of a transfer.
Neto said he wants to play in Europe but is focused on bringing Wolves to the Champions League.
Arsenal's main signing for the rest of the window is Neto, but they have alternative targets if he proves too expensive.
Wolves don't wish to move a player who renewed his contract until 2027 in March, but talks are underway between the two clubs.
While Arsenal is interested in Neto, they won't make a transfer unless it improves their team.