BENDIGO antiquarian Peter Valentine managed to receive the $12,500 price tag for the Abednego painting, but could not entice the Bendigo Art Gallery to add it to its collection.

The painting allegedly behind the naming of Bendigo was put up for sale last month and will remain in the city after a Bendigo businessman purchased it.

Mr Valentine said it was pleasing to keep the painting in Bendigo.

"I'm quite happy it's staying here," he said.

The English boxer featured in the painting, William Abednego Thompson, had a similar boxing style to a shepherd at Ravenswood's Run.

The shepherd was apparently given the nickname "Abednego", which later became "Bendigo". A creek through his property was then given the name Bendigo Creek.

Mr Valentine said the Bendigo Art Gallery was given the first opportunity to make the purchase.

"The board sent me a brief email saying they had decided not to proceed with adding the painting to their collection," he said.

"We had lots of people lined up to buy it though."