Where did you read it? I can't find any confirmation of the deal. It's almost certain, I think, but not confirmed yet. I think it cooled off because football people possibly know he's City bound already. Which means quiet agent, quiet player, little to speculate with. Mind, I'm not sure he's bound, just think it very likely to be the case.
I don't think he's one of the best CBs around yet. Still a lot of ironing to do. He has some impressive things in his game, but still lacks that consistency that defines top CBs. He shares some of those David Luiz traits (too rash, too adventurous, and caught off-guard or with a brain fart too often) in a smaller scale. You expect him to improve with experience, but the chance he won't makes him not worth the £32m I have seen touted for City's bid, in my opinion. Luiz was also supposed to improve and become a beast with time, and he only got worse. I'm still confident Mangala will have a lot more success.
Can't compare him with Varane, I saw very little non-Porto football this season so must have seen Varane play 4 or 5 times and paid little attention to him.
If we indeed sell him for €40m and substitute him with a <10m Martins Indi, as it seems to be the case, I don't think we'll be complaining much.