Wolfsburg have agreed a fee of around £10million for the 21-year-old defender.
“We still need to formalise the deal and the player has to agree terms with the German club,” Palermo director of sport Walter Sabatini told Mediagol.
“Let us just say there is no signed paperwork, but there are some very advanced negotiations in place between Palermo and Wolfsburg.
“The reports suggesting a €14m transfer are more or less accurate, yes.”
“I did expect a more prestigious side to make a genuine proposal. Some of his performances in the last few months prompted them to take a step back and in my view that was a mistake,” he continued.
“Simon should be valued for his qualities and not the mistakes that can be fixed. He made a few errors, but that can happen to all players. He remains very strong, good in the air and quick.
“Let us not forget he is 21 years old and has already played 70 Serie A games. It’s not easy to play first-team football in a side that qualifies for Europe at that age.
“I’m sure he’ll reach those big clubs soon enough, assuming the Wolfsburg deal is finalised.
“He had hoped for Manchester United or Juventus, but I’m confident he will get those opportunities in the future.”
Manchester United, Manchester City and Tottenham have all been linked with the Danish centre-half.