Their statement read: “The truth is that Arsenal made a formal offer of €35m (£29m) to which Lyon have not responded for this one reason: Lyon will keep Lacazette, who is irreplaceable and one of the leading players in Bruno Genesio’s squad.”
Alexandre Lacazette - 5 things you need to know
But The Mirror claim Lyon have told the club they are willing to do business if they fork out £40m.
Wenger was informed of those conditions before making a bid.
The French boss wants to bring in another strike partner for Olivier Giroud and Lacazette remains his top target.
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The north London outfit had been tracking Gonzalo Higuain in recent weeks but the Argentine completed his move from Napoli to Juventus earlier today.
Inter Milan’s Mauro Icardi is another forward understood to be on Wenger’s wishlist after his agent reportedly met with Arsenal officials.