Arsenal are set to sign the Ivorian winger from Lille in a £72million deal that will be made up of instalments spread over a number of years.
However, Italian newspaper La Repubblica claim he had told Napoli boss Carlo Ancelotti that he was ready to go to Italy but owner Aurelio De Laurentiis was reportedly unwilling to meet Lille’s valuation of their star player.
Arsenal appear to have beaten off stiff competition for one of the most in-demand players in Europe, who chatted with Ancelotti on the phone this week.
Pepe, 25, scored 22 goals in Ligue 1 last season and was second in the scoring charts behind Paris Saint-Germain star Kylian Mbappe.
Both Manchester United and Liverpool have tracked him and Bayern Munch were said to be interested as well.
Lille president Gerard Lopez recently revealed four clubs had submitted bids that were acceptable and the Gunners have managed to lure him despite not being in the Champions League next season.
His claims also contradict the Italian report as Lopez said Napoli were happy to pay what Pepe’s camp wanted.
“Last year we asked Pepe to stay with the promise that we would sell in this transfer window,” he said earlier this week.
“We received offers that satisfy us economically from four big clubs.
“[Napoli chairman Aurelio] De Laurentiis has satisfied our request for €80m. Now it is up to the player to decide where he wants to go.
“He must make that decision based on the offers that his agents have received from the four clubs.
“On Monday, Pepe will return from vacation and I believe that by the middle of the week he will have made a decision.”
Pepe will become Gunners boss Unai Emery’s fourth signing of the summer window.
Forward Gabriel Martinelli, 18, and loanee midfielder Dani Ceballos, 22, have joined from Ituano and Real Madrid respectively.
Arsenal also paid £27m to sign 18-year-old centre-back William Saliba but he will spend next season on loan at Saint-Etienne.
Tottenham were also interested in Saliba but he chose Arsenal over their north London rivals.
While Pepe is primarily a winger, he is also capable of playing through the middle and was used by Marcelo Bielsa in his short spell as Lille boss.
However, he is likely to be used on the right of a front three and a froward line of Pepe, Alexandre Lacazette and Pierre-Emerick Aubameyang is a formidable prospect.
Arsenal are still a bit light at the back and Emery would like to sign a left-back before the window closes.
They are trying to conclude a deal for Celtic’s Kieran Tierney but are yet to meet their demands of around £25m.
