Normally I don't go along with these types of big name signings because they seem too unrealistic but it seems likely that he will leave Madrid this summer. The probable signing of Neymar and possibly Aguero will mean that one of Benzema or Higuain (possibly both) will end up leaving and I think we are one of the only clubs he could go to. Man utd, Chelsea, both Milan's and Barcelona all have enough front players which leaves Bayern Munich and Man city (if Tevez leaves) as the only viable alternatives for him. Bayern already have Gomez who plays the same role as him so I can't see him going there and Man City also have the same problem with Dzeko and Tevez both being number 9's. One possible spanner in the works is that Wenger rarely makes big money signings however I don't think that will be a problem. Ou wage bill is likely to enough to match what he is being paid and the transfer fee could be low as Madrid have been known to let good players leave on the cheap (VDV, Sneijder etc). All in all, although it probably won't happen there are enough reasons (such as where else can he go?) to make it seem possible. At the very least it gives you something to dream of if Wenger is underwhelming you (like he is doing to me) with his signings.
It might depend on how much first team action he's getting. Whilst he's at a good club and on good wages, any footballer's priority is to play games at the top level and that's something we could offer him at Arsenal.
As I said they may be looking to sell, and given the available lack of buyers he might be cheap enough for us to afford (so £20 mill maybe).
