Citi, Wells Fargo In Advanced Talks with Wachovia (WB); Wachovia Stock Down 60% (Update)

The Wall Street Journal is reporting that that Wachovia (NYSE: WB) is in advanced talks to sell itself to Wells Fargo (NYSE: WFC). According to sources familiar with the situation, Citigroup (NYSE: C) was also involved in talks with Wachovia, but by late Sunday night, the likely bidder was narrowed to just Wells Fargo.

The WSJ says that Federal officials have been involved in the discussions and likely pushing the two banks to reach an agreement as soon as possible in an attempt to avoid continued pressure on Wachovia's deposit base.

Shares of Wachovia are currently down more than 60% in pre-market trading. The stock most recently traded around $3.88. Meanwhile, Wells Fargo stock is only trading about 3% lower.

UPDATE: CNBC's Charlie Gasparino is reporting that Citi is now in the lead for the possible acquisition of Wachovia. He said that if Citi seals the deal, some government entity would likely back it, making the deal very interesting.

Wachovia Corporation, a financial holding company, provides commercial and retail banking services, and other financial services in the United States and internationally.

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