Distin cost City £4m from Paris St Germain, which represents a 50% profit for the Blues, but Kevin Keegan and the board must decide if City can afford to weaken the City defence.
Newcastle have also been linked with City's Richard Dunne, though their number one target remains Jean-Alain Boumsong of Rangers.
Souness has offered £7m but the Scots are holding out for £10m. Should a deal be agreed though, manager Alex McLeish, who was at the West Brom game, is expected to turn his attention to Distin himself.