Arsenal winger Nicolas Pepe has held further talks over a proposed loan move to Ligue 1 outfit Nice, according to a report.

The 27-year-old is seemingly set to leave the Emirates Stadium this summer after falling down the pecking order under head coach Mikel Arteta.

Pepe is yet to play in any of Arsenal's opening three Premier League fixtures and was left out of the matchday squad for Saturday's 3-0 victory away at Bournemouth.

According to the Daily Mail, talks are ongoing between both Arsenal and Nice over a potential season-long loan deal for Pepe, who has two years remaining on his contract.

The report adds that Nice have identified Manchester United youngster Amad Diallo as an alternative if they fail in their pursuit of Pepe.

Since arriving at Arsenal from Lille for a club-record £72m in the summer of 2019, Pepe has struggled to reach the heights expected in North London.

The Ivory Coast international has recorded 27 goals and 21 assists in 112 appearances for the Gunners across all tournaments, but he only started five times in the Premier League last season and contributed to just one goal and two assists.

It is thought that Pepe would be keen to return to Ligue 1, where he spent two years with Lille and won the club's Player of the Year award in 2018-19 after netting 22 goals and providing 11 assists in 38 French top-flight appearances.

Speaking to reporters on Friday about Pepe's future at Arsenal, Arteta said: "What we can communicate we always do when it's the right moment.

"We discussed that we have a big squad and we've made some decisions and allowed some players to leave.

"Until the end of the window anything is possible with any player. We want to only bring certain qualities through that door and if not then it's not worth it.

"I will be totally happy and focused on getting the best out of these players, for sure."

Arteta is believed to be looking to recruit a new winger before the summer transfer window shuts, but The Athletic claims that any potential arrivals at the Emirates will depend on whether Pepe leaves the club.

A recent report states that the Gunners have held talks with the agent of Wolverhampton Wanderers' Pedro Neto over a proposed summer switch to North London.

Bruno Lage's side have no intention of selling the 22-year-old, however, who is under contract at Molineux until the summer of 2027. body check tags ::