(Corrects employees number to 350 from 3,500 in eighth paragraph)
FRANKFURT, May 16 (Reuters) - Private equity (Swiss: PEHN.SW - news) group HgCapital has put on ice a sale of Schleich, the German company that makes high-quality miniature animal figures and Smurfs toys, three people familiar with the matter said.
The people close to the sale process said that HgCapital's price expectations had been too high.
HgCapital had hoped to get 200 million euros ($257 million), a valuation above that of Schleich's larger rivals, while bidders had offered about 160 million euros, one of the people said.
"Schleich has developed well and the question is when will buyers acknowledge that adequately," a person close to HgCapital said, adding no specific time had been set for a possible relaunch of the sale.
The private equity group bought Schleich, based in Schwaebisch-Gmuend in Germany, in 2006, at an enterprise value of 165 million euros.
The company, founded in 1935 by Friedrich Schleich, started out as a maker of plastic components. In the 1950s it introduced its range of Schleich figurines, that now includes Smurfs, Snoopy, The Muppet Show characters as well as dinosaurs, domestic and wild animals.
It employs 350 staff and has annual sales of roughly 100 million euros.
Schleich in 2012 saw core profit or EBITDA fall to 18 million euros missing a 30 million euro target, as the company struggled with a revamp of its sales force.
"We see encouraging trading activity in the new year as sales force productivity improves," HgCapital said in its 2012 annual report.
($1 = 0.7775 euros) (Reporting by Arno Schuetze and Alexander Hübner; Editing by Jane Merriman)