Reports hard it earlier that Sevilla have already reached an agreement to sign the 29-year-old on a three-year contract with a signing-on fee in excess of €10 million.
Ben Arfa, who is available on a free transfer after his contract with Nice expired this summer, has also attracted interest from Paris Saint-Germain and Lyon following a stellar season in Ligue 1.
But Aulas believes his side are still in the race for the midfielder, but concedes the Premier League champions may have the advantage.
"Ben Arfa, it is a question of passion. He is close to our desire, our enthusiasm, to our fans. I think that he really wants to join Lyon,” Aulas told Canal+.
"If he does not come, it will be for reasons that have nothing to do with passion. I believe that it is more Leicester City in terms of the direction he is heading. That is what people have told me who spoke to him on the phone this afternoon."
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