Arsenal manager Arsene Wenger admits he expects Jamie Vardy to “stay at Leicester” this summer.
The Frenchman appears to have accepted defeat in his chase for the striker after the Gunners triggered his £20million release clause.
Vardy is currently with England at Euro 2016 and scored in their 2-1 win over Wales on Thursday after coming on as a half-time substitute.
He has insisted he would not make a decision on his future until after England’s involvement in France ended, but now reports suggest the 29-year-old looks set to stay at the Premier League champions.
And in an interview with Chinese TV, Wenger said he believes Vardy will stay at the King Power Stadium.
He said: “Jamie Vardy is, at the moment, at Leicester and from what I know, he will stay at Leicester.”
After Arsenal came in for Leicester’s top goalscorer last season, the Foxes made a counter offer to Vardy, who only signed his most recent contract until 2019 in February, in a bid to keep him at the club.
Vardy scored 24 goals last season as the Foxes won the title by 10 points, guiding them to a shock Premier League title win.
With Champions League football to look forward to next season, Leicester boss Claudio Ranieri is aiming to strengthen his forward line.
Watford have rejected a bid in excess of £15million for striker Troy Deeney, after Leicester launched a bid for the Hornets captain.