After spending last season on loan at Tottenham Hotspur, Palhinha returned to Bayern when Spurs decided against making the deal permanent - leaving the Bundesliga giants in the market for a buyer.
Benfica have begun to position themselves as a leading candidate to sign the Portugal international and hope to progress quickly.
The Lisbon club understand Palhinha's value is €25 million, but are attempting to find a deal that suits them. Bayern paid double that fee to bring him to Germany from Fulham in 2024.
His old boss Marco Silva has emerged as the key figure behind Benfica's pursuit of the 31-year-old, and the clubs are in talks over potential conditions.
The two enjoyed a productive spell together at Craven Cottage, where Silva played a major role in turning Palhinha into one of the Premier League's best defensive midfielders.
Flashscore understands Silva had also wanted to reunite with Palhinha at Fulham, if he had remained in charge at Craven Cottage beyond this summer.
His move to Benfica has not changed the two's reunion plans, with the Portuguese coach now attempting to convince his former player to return to his homeland.
Negotiating a deal will not be easy, however, as the transfer and personal terms are of big significance to Benfica and they need to find a suitable agreement.
But Bayern no longer view Palhinha as part of their long-term project, and the club are hoping to offload him to make space for their wider squad rebuild.
Dean Jones is a transfer news and football insider for Flashscore, since 2025. He has been a journalist on leading UK newspapers and websites over the past 20 years, establishing himself as an authoritative and trusted voice in the industry.
