Leicester City winger Riyad Mahrez reportedly favours a move to Arsenal this month, despite beginning talks with Premier League rivals Liverpool.

The Algeria international is understood to be at the centre of a transfer tug-of-war between the two clubs, both of whom are prepared to spend big to land one of their top targets.

Liverpool were the first to make a move as, according to The Express, discussions are already underway with Leicester and Mahrez over the terms of a January switch.

However, the same report indicates that the 26-year-old is holding out for an offer from Arsenal, which is unlikely to arrive until they offload Alexis Sanchez to Manchester City.

City boss Claude Puel reiterated on Thursday that he is keen to keep Mahrez at the King Power Stadium, where the player handed in a transfer request at the start of the season.