'Pay up' - Celtic reject Arsenal bid for Kieran Tierney with offer £10m below asking price
The Gunners have submitted an initial bid of £15million but it has been rejected by the Scottish champions.
Boss Unai Emery has pinpointed the Scotland international as a key target with left-back a priority.
However, the offer falls below Celtic's asking price of at least £25million, according to the Scottish Sun.
Arsenal are expected to return with an increased offer and will try to use fringe players like Carl Jenkinson, Jordi Osei-Tutu, Emile Smith Rowe or Eddie Nketiah as makeweight in the deal.
The Hoops are open to being offered players but want a significant fee.
Celtic boss Neil Lennon admitted he was expecting a bid for the 22-year-old, as well as Olivier Ntcham.
“I would expect bids," he said. "We’re realistic and I’d be surprised if there weren’t any offers for them, put it that way, because they’re both extremely talented players.
“So I may have a decision to make.
“But there’s been nothing for us to think about yet. For someone so young, Kieran already has vast experience — he’s played Champions League, Europa League, internationals and he’s won trophies.
“I don’t think he would fear going anywhere. But, personally, it would be a wrench for him because the club means so much to him."
Tierney is also attracting interest from Napoli. Carlo Ancelotti is a big fan of the player and the Italians are understood to be tracking developments before putting in an offer.