A claim that Wesfarmers has “walked away” from negotiations to sell its insurance division to Zurich Australia has been refuted by market sources here and overseas.

The Australian Financial Review claimed on Friday that the two companies had agreed on a sale price and had entered due diligence, but the deal fell over when the newspaper reported details of the negotiations.

“It is understood the revelations prompted Wesfarmers shareholders to caution the company against a deal at anything other than a knockout price,” the newspaper says.

However, industry sources in Australia and Europe have told insuranceNEWS.com.au three insurers – QBE, Allianz Australia and IAG – are actively in the running to buy Wesfarmers Insurance.

The sources – each of whom has proved to be reliable in the past – say the sales negotiations are not concentrated solely on Lumley Insurance.

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