Liverpool could be kicked into action for Hamilton Academicals midfielder James McCarthy.
Reid believes it would benefit McCarthy to get a year in the SPL behind him before thinking about leaving New Douglas Park.
Reid told Setanta Sports: "We have not had any contact from Palermo. As far as we are concerned there is no business.
"Young James will remain a Hamilton player I think this season, we hope he will."
McCarthy, who was linked with moves to Liverpool and Reading last season, has three years left on his contract with Hamilton.
Reid added: "If an offer comes in we will certainly look at it, but as far as we are concerned there is no offer in as yet."
Liverpool already boast McCarthy's former Accies teammate, Gary Mackay-Steven, on their books.