The Gunners have fallen behind in the chase to sign the Fiorentina striker despite submitting a £50 million bid earlier this month.
Juventus is now looking increasingly likely to be the Serbian’s next destination with Vlahovic keen on a move to the Italian giants, according to reports.
According to the report, Mikel Arteta’s side have scouted the forward for several months and the Spaniard favours a move for the 27-year-old.
Espanyol broke their transfer record two years ago when they signed De Tomas from Benfica for £16.7 million.
The Spain international is enjoying a brilliant campaign so far, scoring 11 goals in 20 league appearances.
Espanyol - who currently sit 13th in La Liga - will be desperate to keep hold of their star man, who has a £58.6 million release clause in his contract.
With Pierre-Emerick Aubameyang currently out of the first team picture at the Emirates Stadium, the Gunners will have to act fast if they are to bolster their attacking options for the rest of the 2021/22 season.
The Gabon striker reportedly snubbed a loan move to Saudi Arabia this month following interest from both Al Hilal and Al nassr.
Meanwhile, Eddie Nketiah has been heavily linked with a move away from the London club this month, however it is looking like any potential departure for the 22-year-old could go down to the wire.