MMA's asking price is claimed to be £20m above market value
A £20m 'reality gap' has stalled talks on the sale of Swinton Group by its French parent company MMA.
The £100m price tag MMA is thought to be asking for the broker could be 20% above the market value, according to analysts.
"Unless MMA drops its price significantly they will never find a buyer in the UK," said one industry source.
Names linked to the sale include Bradford & Bingley, Cox Insurance and Budget. While Bradford & Bingley and Cox offered no comment, a source at Budget said the company had not held talks about the sale.
Swinton chief executive Patrick Smith said: "As I understand it the company probably won't sell. Any buyer would have to pay for the future success built into the company.
"We know what Swinton is worth and if no one will pay that then we will carry on making money."
But Smith confirmed Swinton is holding talks to sell Walmsley Insurance Brokers (commercial) and will launch a small business policy next year through its traditional broker channel.
Under the new commercial lines strategy, Swinton is hoping to generate about £12m to £20m GWP in three years, selling standard commercial products to traders, shops and small businesses.
Smith said: "We have been in conversation with all the major insurers and are in a position to put together a panel to work with us."
The change in strategy follows the failure of Swinton's original aim of building a commercial portfolio through the acquisition of Walmsley.
Smith said: "In a sense you could say it was a mistake to think Walmsley would suit our strategic commercial lines purpose. However with the purchase of the high quality personal lines book held by Walmsley we consider the purchase to have been a success."