Bayer Leverkusen, Stuttgart and Rennes are the three foreign clubs interested in signing Folarin Balogun on a free transfer.
Folarin, 19, is set to depart the Emirates in the summer when his contract expires with contract negotiations believed to have stalled.
The Gunners are desperate to tie the youngster down to a new deal as they restarted talks with the player in November.
But there is now growing fears that the club are resigned to losing the England youth international who could move abroad in search of regular game time.
The Mirror reports Bayer Leverkusen have emerged a possible destination for Balogun and are ready to offer him a lucrative contract.
The news outlet also stated that Stuttgart are also desperate to sign the youngster with Ligue 1 side also fighting hard to secure his services.