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"It's obvious that the drama between Lauren and (her husband) Andrew that involved Simon, makes him a bit upset," a source told People, adding that he has been in contact with the pregnant 36-year-old since her divorce turned sour, but "won't see Lauren in person until things calm down".
"He cares about her and has been checking in on her and the baby," the insider revealed. "He still encourages Lauren to quickly figure things out with Andrew so they can move forward with their divorce."
The source also confirmed that "Simon still has no plans to move in with Lauren" but says that the X Factor judge, who has several properties in Beverly Hills, "can put Lauren in one of them (when he's working in LA) so he can spent time with his baby."
Joining the father-to-be on his month-long annual cruise of the Mediterranean is his former flame Sinitta. Simon is also being accompanied by Kelly Bergantz, a top TV executive at Syco and a close friend, as well as her sister Jamie, the Mail reports.
On Monday, the group soaked up the sun in the French Riviera on board a £50million Slipstream yacht, and Simon was pictured riding the waves on a jet-ski.
He has kept a low-profile in the two weeks since it emerged that Lauren is expecting his baby. Then, on 1 August, he attended an X Factor press conference in Los Angeles, where he addressed the news for the first time.
"There are a lot of things I will eventually clear up when the time is right," Simon told reporters. "I really have to be sensitive here because there are a lot of people's feelings involved."
The press conference came hours after it emerged that Lauren's husband Andrew has cited Simon in his divorce papers, accusing his wife of adultery with the British millionaire.
It was recently reported that the two men have come face-to-face for the first time since the scandal broke. Simon is believed to have met up with Andrew in New York just before catching his flight back to Europe.
They are said to have secretly convened at the Francis S Gabreski airport in Westhampton Beach, where they spent three hours clearing the air.