will it happen

VALAD Property Group's management is believed to be seeking an equity backer to launch a company buyback worth as much as $330 million.

The group is close to announcing details of a number of small asset sales worth more than $50 million collectively.

Sources suggest management is trying to team up with a venture capital fund to buy the Australian listed property trust for 20c a security.

Some say Valad is "priced for extinction" on the Australian Securities Exchange.

The company's market capitalisation is about $75 million, with a security price around 5c -- a far cry from the highs of about $2.35 in May last year.

Valad's management team includes executive director Stephen Day, the former Lend Lease executive who co-founded the company about 14 years ago with Barry Wynne, managing director Peter Hurley, and Jeff Locke, chief executive of the company's Asia-Pacific operations.

Yesterday, a Valad spokesperson said it could not comment on the speculation, but there would be an announcement soon about small asset sales "here and there". This would reiterate $50million worth of asset sales announced at the company's annual general meeting in October.

There is also market speculation that Valad could move to return the European arm of the business it bought from Kevin McCabe last year.

Valad bought the McCabe-backed Scarborough Group at the height of the property cycle last year for $2billion. Analysts said the move would make sense, as the European operations were undermining the company's share price.

"It wouldn't surprise me if they were trying to privatise," one industry source said.

The source added that he would be surprised if anyone would want to take over the company for 20c a security. "It is a big risk, but it could happen."

One analyst said the company's share price was trading where it was because of liquidity concerns, declining asset values and because half of the company's debt was with Britain's struggling HBOS.

"If they could get through their liquidity problems and deliver earnings per share of about 5c, which is achievable, 20c per security could look attractive for the management team."

Previously it was thought Valad wanted to sell Valad Capital Services, which has at least a $30 million exposure to at least three failed projects by private property developer Petrac. In October, Valad withdrew its earnings guidance of seven to 9c per security for the 2009 financial year and suspended its distribution for the first half until further notice. Last year, the company paid $173.3 million in distribution.

In June, Valad had $10 billion in assets under management with 17 funds investing in Australia, New Zealand and Europe.