NEW YORK — Wachovia Corp., Citigroup Inc. and Wells Fargo & Co. extended the standstill in their legal tussle over Wachovia through Friday morning.

Meanwhile, the Federal Reserve Board is trying to broker a deal between the three, perhaps breaking up Wachovia between Citi and Wells Fargo. A deal could come Wednesday or Thursday, sources said.

Wednesday afternoon, the three banks said they continue their consultation with the Federal Reserve to reach a deal out of court, and extended their legal standstill agreement until 8 a.m. on Friday.

The standstill, agreed upon late Monday, was to expire at noon Wednesday. At that point, Citi could have continued to sue Wachovia and Wells and their directors for $60 billion in claiming breach-of-contract and tortuous interference at the Supreme Court of the State of New York.

The three parties are entangled in a complicated battle over two deals to acquire Wachovia. On Sept. 29, Citi had struck an agreement in principle to buy Wachovia's banking operations, but Wells Fargo stepped in on Oct. 2 to buy all of Wachovia. Wachovia's board opted for the Wells Fargo deal, which it says is more favorable for its shareholders.

Citi obtained a restraining order Sunday - that was upheld Monday morning - to prevent Wachovia from continuing with its Wells deal. On Monday, it followed up with its $60 billion suit.

Wachovia, meanwhile, tried to get a restraining order from the United States District Court for the Southern District of New York to prevent Citi from interfering with its Wells Fargo deal.

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