Palermo president Maurizio Zamparini claims Ricardo Alvarez is an Arsenal player, commenting: "At this moment he has already signed for the Gunners."
Zamparini revealed earlier on Friday that he had been chasing 23-year-old Velez Sarsfield midfielder Alvarez, but negotiations became difficult when Arsenal and Malaga registered their interest.
Inter Milan, Roma and Sevilla are also believed to be tracking the 12 million Euro star, but fresh comments from Zamparini on Friday evening would suggest Arsenal have won the battle.
"We did have a concrete bid for Alvarez and had him in our grasp back in January," Zamparini is quoted as saying on Radio Kiss Kiss. "Unfortunately, we didn't complete the move in time, so we lost him to Arsenal."