Palestra has spent this season on loan at Cagliari, where he has made 36 Serie A appearances, contributing one goal and four assists.
His performances have drawn interest from clubs across Europe, with Liverpool, Arsenal, Tottenham Hotspur, Newcastle United, Chelsea, Manchester United, Juventus, Inter Milan, AC Milan, Roma, Napoli and Barcelona all credited with varying degrees of interest across the campaign.
Di Marzio told Tuttomercatoweb that if Manchester City formally enter the race, Atalanta's asking price — currently set at €40m to €45m — could rise to €50m or €60m, pricing Italian clubs out of the running entirely. Inter had been the frontrunner among Serie A sides and were preparing a bid, planning to fund the move through capital gains from player sales. City's superior financial position fundamentally changes that calculation.
The interest from City is understood to be particularly strong if Enzo Maresca is confirmed as the club's next head coach in succession to Pep Guardiola. Maresca worked with Palestra at international level and is a known admirer of the player's technical profile.
Palestra has been capped by Italy at senior level and is considered one of the most complete young full-backs in European football, capable of operating as a right-back or right wing-back.
Atalanta hold his contract until 2029 and have made clear they will not accept offers below their valuation. His previous club Atalanta also retained him through his breakthrough years before facilitating the Cagliari loan, suggesting any sale would require full market value.