On Monday night, The Times alleged that the Macron Stadium or the Manchester Arena could stage the welterweight contest on May 20, with a deal said to be verbally agreed.
However, Arum has branded the article "complete bull***t", while revealing that WBO champion Pacquiao is currently discussing a potential appearance in Dubai.
Arum told The Courier Mail: "Total and complete bulls***. The Amir Khan story has come out of nowhere.
"What's happening is that Manny is talking to these people in Dubai who have offered him an insane amount of money. Whether [the offer] is real or not real — he is determined to explore it to see if it has any validity. That's all I can say."
Khan is currently looking to secure an opponent for a return to the ring during the spring after failing to agree terms with long-time rival Kell Brook.