Reports in Spain claim that Liverpool have entered the race to sign Valencia defender Shkodran Mustafi.

The German international defender has been linked with a move to Arsenal, whose search for a new centre-back intensified following Sunday’s 4-3 home defeat to Jurgen Klopp’s Liverpool. With Per Mertesacker and Gabriel sidelined through injury, and Laurent Koscielny not match fit, Wenger had to field youngsters Calum Chambers and Rob Holding in defence against Liverpool.

Reports on Monday suggested that the Gunners had yet to agree a fee with Valencia. However, of more immediate concern may be the reported interest of Liverpool in Mustafi.

According to Spanish radio station Deportes SER, Liverpool have also approached the La Liga club about the possible signing of the 24-year-old. Liverpool have began negotiations with Valencia director Garcia Pitarch over a deal.

The Reds may also have the edge over Arsenal, as they are willing to offer Spanish winger Luis Alberto in part exchange. Though, to offset that, Arsenal can dangle the carrot of guaranteed Champions League football next season.

Debt-ridden Valencia are being forced to sell Mustafi to comply with Uefa’s Financial Fair Play rules. Indeed the sudden emergence of Liverpool as a possible buyer for Mustafi could be regarded as a ploy to strengthen the Spanish club’s bargaining position with Arsenal.

“We’re above the FFP guidelines, that’s the reality, and as of today, the four players we’ve signed cannot be registered, meaning we need to reduce the cost in a significant manner to register the players and sign a centre-back, which is a priority in case one of the ones at our club leaves,” said Pitarch.

“Obviously, if they don’t leave, we can’t sign a new one not only because of financial restrictions, but also because it wouldn’t be logical to have five or six centre-backs.

“We need to continue with a reduced budget, but if there’s an exit, we need a new centre-back.”