"We have been in talks to buy Villa the past week but there has been no agreement," Valdano said in an interview with Spanish radio station Onda Cero.
"What appeared to be well on the way to happening looks now to be falling through," he added. "If there is no accord we still have two or three more alternatives."
"They don't want to sell him and that's why they quoted us an astronomical price," he said.
"We turned (a Real Madrid offer) down because we have no intention of selling Ribery," Bayern chairman Karl-Heinz Rummenigge told Bild newspaper, adding that the Spanish club did not specify an exact amount while other enquirers had.
"Other teams have confronted us with specific sums," Rummenigge said. "Chelsea have been in touch, as well as Manchester United and Barcelona."
"We did not buy Franck two years ago to cash in but to improve our team. Now we have to do everything for him to stay and I am determined to do that," Rummenigge said. "A player has to respect his contract, in this case until 2011."
Lyon striker Karim Benzema was another of Madrid's targets, but there was plenty of time before the end of the transfer period to negotiate a deal for the player, Valdano said.
It appeared the club's efforts to sign Liverpool and Spain midfielder Xabi Alonso would come to nothing as the English club did not want to sell him, he added.
"There are interesting offers for some players but many of them do not want to leave," he said.
