Aston Villa boss Unai Emery has said Ollie Watkins is "happy to stay" at the club following Arsenal's bid for the striker.
Sources told ESPN that Arsenal put in a formal offer for the England international on Wednesday to address their struggles in front of goal. But, the bid was rejected out of hand by Villa.
Watkins' 19 league goals last season fired Villa into the Champions League for the first time in 41 years. This campaign, he is the club's top scorer in the Premier League with 10 goals.
Despite the 29-year-old having previously expressed a desire to play for Arsenal, Emery said the 29-year-old sees his future at Villa Park.
"Yes, he is happy to stay. We asked him how he is feeling every day and year he is being here with Villa and he is happy here," Emery said at a news conference on Friday.
"The commitment of Ollie Watkins with us is a huge commitment. He appreciates a lot how Villa was always supporting him and helping him, when we joined here two years ago how we were working with him and getting the best of him," Emery continued.
"Now we need him, like he needed Aston Villa in the last years. I am speaking with him a lot, he is always adapting with every circumstances we have and of course when some teams calling us being interested in the players it's very good for us and the players.
"Some players prefer to leave and some accept to stay here and commit with our challenges. One of them is Ollie Watkins."
The imminent departure of Jhon Durán to Al Nassr has only furthered the club's resolve to hold on to Watkins. Monchi, the club's president of football operations, confirmed that the club have accepted a bid from the Saudi club in the region of €85 million ($88m).
Watkins' decision to remain at Villa Park means Arsenal's hopes of signing a striker this month are fast fading away. The club's pursuit of RB Leipzig's Benjamin Sesko hit a roadblock after sources told ESPN that the Bundesliga club are reluctant to sell him this month.
"We are trying everything we can but I don't want to give any reassurance or not," Arteta told a news conference on Friday.
"I don't know. It doesn't depend only on us. Our intention is clear but the possibilities are affected by three parties.
"I am very confident with the work the club is doing and exploring every single opportunity that we believe can have an impact on the team. That is certainly the case. If we can agree something we will and if not, we won't."