The Reds emerged as frontrunners to sign the England international overnight after the player reportedly turned down a move to Premier League champions Chelsea in favour of joining the Anfield outfit.
However, the Evening Standard reports that Liverpool’s opening bid of around £30m has been rejected by the Gunners, who are holding out for a £40m offer.
Arsenal had agreed a fee which could rise to £40m with Chelsea before Oxlade-Chamberlain made his preference known, although Liverpool are looking to pay less than that due to the player’s desire to join them.
However, Arsenal are unwilling to lower their demands and would be happy to keep the 24-year-old at the Emirates Stadium if their asking price is not met, despite Oxlade-Chamberlain having less than a year remaining on his contract.
Oxlade-Chamberlain is reportedly seen by Liverpool as an option to replace Philippe Coutinho, who could be on the verge of a £148m move to Barcelona.