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Palermo president Maurizio Zamparini claims Arsenal have beaten his club to the signature of Velez Sarsfield midfielder Ricardo Alvarez.
The Serie A outfit were hoping to pip the Gunners to the post and tempt the Alvarez to Italy.
Reports on Friday suggested they were still in that particular hunt, with no deal agreed for his transfer as yet.
Zamparini, though, has now conceded defeat in the race and claimed that the highly-rated 23-year-old is on his way to England.
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"We did have a concrete bid for Alvarez and had him in our grasp back in January," he told Radio Kiss Kiss.
"Unfortunately, we didn't complete the move in time, so we lost him to Arsenal.
"At this moment he has already signed for the Gunners."
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