Walcott must be in a bit of a weird spot. The club invested in him, he didn't deliver, and now it's clear he could be the makeweight in a deal to bring in a better player.
Thinking about what we know about him, it wouldn't surprise me if he wanted to stay, get a nice break during the Euros and a solid preseason, and try to prove himself.
He's been rubbish but you couldn't definitively rule out him having a better 16-17 than Mahrez.
The goal with our forward line has to be to upgrade Giroud and send him to the bench.