Alexis Sanchez had 'shaken hands' on new contract prior to Bayern Munich defeat

Arsenal forward Alexis Sanchez had reportedly agreed to put pen to paper on a new contract at the Emirates last season, but the 10-2 aggregate Champions League defeat to Bayern Munich changed his mind.

According to The Sun, the 29-year-old has finalised terms over a contract extension in December last year which would have prolonged his stay beyond the summer of 2018.

However, the attacker had to rethink his decision after the Gunners were humbled by Bayern Munich in the Champions League across two legs, where they lost 5-1 in each outing.

Arsene Wenger's side went on further to miss out on Champions League football for the first time in two decades, and Sanchez has since played hardball over negotiations which don't seem to have progressed.

Both Manchester City and Paris Saint-Germain are keen on luring the Chilean away from the Emirates Stadium, and the attacker looks more likely to leave on a free with Wenger reluctant to sell midway through the season.

Likewise Sanchez, Mesut Ozil has just over six months left on his contract, but Wenger has recently hinted that the Germany international could extend his stay after a string of top-notch performances.