Arsenal have been heavily linked with the Germany defender in recent weeks.
Highly-respected Spanish journalist Guillem Balague has revealed on Twitter that Arsenal indeed want to sign Valencia defender Shkodran Mustafi.
The Gunners have been heavily linked with the Germany centre-back in recent weeks but The Telegraph reported on Wednesday that manager Arsene Wenger is unwilling to meet the Spanish club's £30 million valuation of the 24-year-old.
Arsenal are in dire need of an experienced centre-back, with Per Mertesacker and Gabriel set to miss seven months of the new season between them.
Their frailties at centre-half were cruelly exposed on Sunday when Liverpool beat Wenger's side 4-3 at the Emirates, with 20-year-old Rob Holding - making his Premier League debut - and Calum Chambers, 21, at the heart of their defence that day.
Gunners supporters are furious at the French manager for failing to sign Mustafi, but Balague claimed on Twitter that the 66-year-old is indeed interested in the player, adding that Valencia would accept €30 million (£26m) for his signature.
Mustafi: VFC happy 2 sell for around €30m as they down €10m with FFP. But would rather sell others. AFC want him. Not sure he's good enuf— Guillem Balague (@GuillemBalague) August 16, 2016
It seems to be a case of same old Arsenal as far as transfers go. Granit Xhaka is the only established player to join a side who finished 10 points behind champions Leicester City - who they face on Saturday - last season.