According to John Cross of the Daily Mirror, the Gunners have made an offer to keep the right-back and await his response. Wenger, though, does not expect City to become involved at this stage:
Ahead of the Saturday evening game between the two sides, the official Arsenal Twitter account told of the manager's confidence that Sagna will accept the new terms:
However, David Hytner of The Guardian puts a different spin on Sagna's situation, confirming an offer has been made by the club that has already taken Kolo Toure, Samir Nasri, Emmanuel Adebayor and Gael Clichy:
Bacary Sagna has been offered a three-year deal by Manchester City.
[...] The 31-year-old full-back remains locked in contractual stand-off with Arsenal, the club he joined in 2007, and his current terms are set to expire in June, making him a free agent.
[...] There is an offer of a new two-year contract at the Emirates Stadium ready for Sagna to sign, but he is holding out for three.
The right-back knows that City will give him what he wants, not to mention a significant increase on his £50,000-a-week salary.
Manuel Pellegrini would not be drawn on the report during Friday's press conference, per Mike Keegan of Manchester Evening News:
We're interested in Sagna because we need to balance the team
Right now we only have (Yuto) Nagatomo and Jonathan. If one of them gets injured you need somebody else to come in.
Clearly, despite his advancing years, the Frenchman remains hot property. His WhoScored passing accuracy of 85.1 percent is evidence of his value to the North Londoners.
Wenger's policy of only offering two-year deals as a maximum to players over 30, (Sagna is 31), surely needs to be reviewed.
Sagna continues to provide excellence in his position and it is clear Wenger wants to keep him.
It therefore seems a little bloody-minded to resolutely and steadfastly refuse to deviate from that policy, given that there aren't too many better-performing full-backs in the Premier League right now.
Talksport debates on whether the manager is actually happy to allow the player to leave, with Carl Jenkinson waiting in the wings:
While Sagna’s performances this season have been a huge benefit to the Gunners' title challenge, one detrimental effect has been on the development of Carl Jenkinson.
[...] Jenkinson knew when he joined the club that he would battle Sagna for a starting berth in Wenger’s side and has bided his time and remained patient whilst Sagna’s retains a high performance level.
[...] At 6ft 1inch and in possession of significant pace, Jenkinson has all the attributes to make a top-level full-back and it was these qualities that convinced Wenger to part with £1m for him in 2011.
Whatever the truth of the matter, if Sagna decides to move, it highlights wider issues at the Gunners.
No one doubts that the business model at Arsenal is to be revered, but the game has changed. In order to be successful, Arsene Wenger and his club need to change with it.