Dunno how credible recent reports are, but IMO Madrid won't let him go.
Pepe is almost 33 years old, and showed signs of slight decline last season. Varane is perceived to be a key player for the future of Madrid along with the likes of James and Isco - he started the season slowly but regained a prominent role, starting 21 league games (27 total appearance in the league), to go with 11 Champions League starts - 3000+ minutes in total game-time for the club, which is a very healthy figure. He is arguably the best defensive prospect in Europe right now (with Marquinhos), and still just 22 years old. Plus, as long as Zidane is a part of Real's organisational structure, he won't allow Varane to leave. Afterall, he is a player he likened to Laurent Blanc, and played a big part in bringing him to Madrid.
PS : If and when Varane becomes available (highly unlikely), Mourinho would be all in for him. He even went so far as to classify him 'the best young defender in the world'. A defensive, detail oriented manager like Jose would be salivating at the prospect of Varane + Zouma shielding Courtois for the long term.