Takeover target Aveo Group says it is talking to suitor Brookfield about a deal that would value the company at just under $1.3 billion, even as it repeated earlier warnings there was still no certainty of a deal progressing.

After The Australian Financial Review's Street Talk column reported a takeover deal was due to be signed this week, the retirement home operator said on Tuesday it was in negotiations with privately owned Canadian giant Brookfield over a deal worth $2.195-a-share.