The Federal government is pushing Citigroup and Wells Fargo to reach an agreement tonight that would avoid a court battle over the two banks' fight for Wachovia, sources have told CNBC.
If a deal goes through as talks currently stand between Citigroup and Wells Fargo , Citigroup would receive between 20 percent and 25 percent of Wachovia's $440 billion in deposits.
Wells Fargo would receive the remainder of the firm, including the rest of Wachovia's deposits and its investment bank.
Negotiations to resolve the dispute remain fluid and could change at any time.
On Thursday, the Wall Street Journal reported that both Citigroup and Wells Fargo were surprised by the concentration of assets on Wachovia's books that they regard as low-quality.
Citigroup and Wells Fargoagreed Wednesday to extend their legal standstill in their fight for Wachovia until Friday morning, giving them more time to work toward a mutual agreement. But according to senior Citigroup executives, adeal could be reached as early as tonight.