According to Kieran Gill of MailOnline, Saints are desperate to add more attacking class to their squad following their recent Premier League struggles. Walcott, who moved from Southampton to Arsenal in 2006, is said to be a serious target.
However, it appears as though the two clubs are a long way apart in their valuation of the 28-year-old, who has yet to start a Premier League game this season.
"Arsenal are said to want more than £25 million for Walcott, who enjoys a £110,000-per-week contract that expires at the end of next season," Gill noted. "...They will try to open talks with the north Londoners over the possibility of lowering the asking price in order to bring Walcott back to St Mary's, where he came through the academy."
Additionally, Southampton boss Mauricio Pellegrino has admitted he is someone the club is interested in. "I have been talking about him," he said, per Sky Sports. "He is a good player, but I don't know with the negotiations, with the market, I imagine that this type of player would have a lot of possibility. For us it's not easy."
It's been a testing campaign for Walcott, who has fallen a long way down the pecking order at the Emirates Stadium. Journalist Nick Ames commented on how desperate the forward's situation has become:
A return to his former club could rekindle something in the England international.
After all, Saints are in big trouble in the Premier League, as they sit in 17th position in the table and only out of the relegation zone on goal difference. The team is in desperate need of a goalscorer, and with 19 strikes in all competitions last term, Walcott would fit the bill.
Whether it's with Saints, someone else, on loan or on a permanent deal, it's imperative Walcott finds a new challenge in January. Should he fail to do so, a career that promised so much would be in danger of fizzling out.
Arsenal and United Linked with Fred
Hetherington reported a host of elite clubs from across Europe are interested in the Brazilian, including Paris Saint-Germain, Napoli, Inter Milan, Atletico Madrid and Valencia. However, United and the Gunners are said to be "at the front of the race for Fred."
Manchester City have also been tipped as suitors. As journalist Shane Burns noted, Fred has previously made it clear he would love to work under City boss Pep Guardiola:
The 24-year-old has impressed since arriving at the Ukrainian giants in 2013, growing as a player as part of the Shakhtar midfield. It's no surprise to see he's valued at £30 million, according to the report.
Fred sits in front of the back four and is capable of carrying out a number of different jobs. The Brazilian is energetic, switched on defensively and comfortable in possession.
Arsenal have lacked a player with the quality to control matches in this area during Santi Cazorla's long-term injury layoff. Fred has shown in Ukraine and in the UEFA Champions League he has the attributes to assume that role.