The 19-year-old's future at the Allianz Arena has been one of the biggest talking points of the winter window.
Tel has had no shortage of suitors having given the green light to a move away from Germany following a lack of game time under Vincent Kompany.
He has been restricted to just three starts in all competitions this season - failing to chip in with a goal in any of his 13 outings - with Harry Kane even stressing he needs to play more.
But that hasn't stopped the Frenchman from being a man in demand, with both Tottenham, Chelsea and Manchester United huge admirers of the teenager.
The Red Devils formalised their interest in the player over the weekend, but saw two loan offers rejected, with talks now halted between them and Bayern.
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Spurs meanwhile agreed a permanent fee with the Bavarian outfit, but Tel rejected a move to the club after chairman Daniel Levy flew out to sell him Tottenham's project.
But the versatile winger could still be heading to north London to join their bitter rivals to become Mikel Arteta's first signing of the window.
With Bukayo Saka and Gabriel Jesus out injured, Arsenal have been desperate to bolster their squad for what promises to be a hectic second half of the campaign.
Proving an update on the situation on the talkSPORT Breakshow show on Monday morning, transfer correspondent Ben Jacobs said: "Arsenal this morning are in talks over Mathys Tel.
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"Manchester United had two bids rejected, a loan with an option.
"The problem is that Bayern want a permanent, but from Tel's perspective, he is prepared to go on loan and is open to Man United.
"This might work for Arsenal, if there is an option or obligation it would be in the region of €60m [50m].
"If Bayern's stance softened, this is what Arsenal are trying to understand, but then to Manchester United also come back in.
"Chelsea have Tel on their list as well and would like to sign him permanently.
"There was talk earlier in the window of [Christopher] Nkunku going the other way. Tel is concerned about his game time at Chelsea if he goes there.
"From Arsenal's point of view, the advantage Tel has is that he's a left winger, but he can also play up front.
"His versatility is an appeal to Arsenal and that's why they have talks later this morning."
Should Arsenal secure Tel's services, it would prove to be a brilliant 24 hours for the club having humiliated Manchester City at the Emirates on Sunday.
The Gunners romped to a 5-1 victory, with it being just the second time in Pep Guardiola's managerial career that he has shipped in five goals.
With Premier League leaders Liverpool beating Bournemouth 2-0 on Saturday, Arsenal knew they had to win to remain six points behind.
Alex Crook discusses Tottenham target Mathys Tel departing Bayern Munich this transfer window