Updated from 5:07 p.m. EDT
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Wachovia (WB - Get Report) has reportedly engaged in discussions with Citigroup (C - Get Report) about a possible tie-up between the two, according to The New York Times, which cited sources familiar with the matter Friday.
However, the talks are in very early stages, and no deal may come from the discussions, these people told the newspaper.The Wall Street Journal named even more potential merger partners for Wachovia, in addition to Citi, reporting that it's also holding talks with Banco Santander (STD) and Wells Fargo (WFC - Get Report). Amid worries about its financial health, Wachovia saw its shares plunge nearly 40% during the trading session following the failure of Washington Mutual (WM - Get Report) and the subsequent sale of its banking operations to JPMorgan Chase (JPM - Get Report) late Thursday. Wachovia was reportedly in discussions last week with Morgan Stanley (MS - Get Report) about a possible merger. Those talks apparently ended earlier this week after Morgan changed its status to a bank holding company and said that Mitsubishi UFJ (MTU - Get Report) agreed to take a 20% stake in the firm.