The 28-year-old looked set to be reunited with Guardiola, whom he played under at Barcelona, only for his £60m move to collapse on deadline day after Arsenal failed to secure a replacement. Potentially available for a free transfer at the end of the season, Man Utd were reported to be strong suitors.
Sanchez is out of contract in the summer, leaving Arsenal in the hard position of either cashing in on their star man, or risk losing him for free at the end of the season.
Cutts also stated Ozil is looking for wages of £140,000 per week and a significant signing bonus. It is said that Arsenal are now "very, very, close" to a breakthrough.
Thoughts on Sanchez's comments to Herrera during Manchester United vs Arsenal at the weekend?
Of course, it is in Arsenal's best interest if their talisman leaves the Premier League instead of signing for a direct rival.
Ozil, who is now on a weekly wage of £140,000, is likely to demand a significant wage hike alongside a huge signing-on fee in order to prolong his Gunners stay beyond the summer.
Arsene Wenger remains consistent in saying that Arsenal do not want to sell the Chilean, who could be key to their hopes of finishing in the top four and winning the Europa League - which would book them passage to next season's Champions League if they do miss out on the top four. Ozil has gone to make 127 Premier League appearances for the Gunners. Arsenal sit 5th in the standings, only a point off Liverpool in 4th. The Red Devils already have Henrikh Mkhitaryan and Juan Mata, both players similar to the German in both style of play and calibre.