Chopping up a colony is always a hard decision, but there are a number of arguments FOR fragging it out.
That coral has grown in a unique response to it's environmental conditions. Moving it to another tank will likely result in a very sharp shift in it's growth pattern. By fragging it out, not only do you get to spread your colony around to a number of different folks, but you limit the loss that would occur if the buyer of the whole colony had any sort of tank issues.
As far as the pricing - you will probably be doing some negotiating. 1" frags go from $10 to $35 depending on your local market, so a colony of that size is probably a couple hundred.