* Deal could be worth A$1 billion
* Lend Lease says no certainty a deal will be reached
* Valemus IPO was pulled in July due to weak markets (Adds quotes, background)
MELBOURNE, Dec 17 (Reuters) - Australian property developer Lend Lease said was in talks to acquire the local unit of German construction firm Bilfinger Berger , in a deal that could be worth A$1 billion ($990 million).
"No agreement has been reached," Lend Lease said in a brief statement on Friday, adding there was no certainty a deal would be made.
The Australian newspaper reported earlier that Lend Lease was set to buy the Bilfinger unit, Valemus, in a deal that would make Lend Lease the country's second-largest contractor after Leighton Holdings .
The report said Lend Lease was expected to be able to fund the purchase from existing cash and debt facilities, so would not need to raise funds from shareholders.
The Australian reported Lend Lease was being advised by Gresham Partners and Morgan Stanley.
A spokeswoman for Lend Lease declined to confirm who the advisers were, or how long talks have been underway.
Bilfinger pulled an IPO of Valemus in July, citing weak stock market conditions, just as Greek sovereign debt worries roiled global markets. It had hoped to raise up to A$1.1 billion in a float.
Company executives told a German newspaper in September they were reconsidering an IPO for early 2011.
Valemus has a 4 percent share of an estimated A$120 billion in Australian construction and engineering work up for grabs each year. It has forecast turnover of $4.6 billion in 2010.
Lend Lease shares rose 0.8 percent to A$8.47 in early trade, against a flat broader market.
($1 = 1.015 Australian Dollars) (Reporting by Victoria Thieberger; Editing by Balazs Koranyi)