Citigroup Inc. has all but ended talks to purchase assets or a stake in stricken hedge fund manager Amaranth Advisors LLC, a person familiar with the situation said on Friday, making the chances more remote that the fund will survive.

Citigroup held talks this week with Amaranth for a possible deal that could have given a lifeline to Amaranth, which suffered a $6 billion loss this month in wrong-way bets on natural gas derivatives.

The Greenwich, Connecticut-based firm, a multi-strategy fund manager that in August reported assets of more than $9 billion, could yet strike a deal with Citigroup's Alternative Assets division, the person said. But a decision on the matter appears to lie with Amaranth, the source said.

Amaranth told investors on a conference call on Friday that it was determined to remain in business after suffering the largest hedge fund loss ever. The firm last week forged an agreement to transfer its energy portfolio to Citadel Investment Group and J.P. Morgan Chase & Co. and exit energy trading in a bid to stay afloat.

Amaranth officials could not be reached. A Citigroup spokesman declined to comment.

Connecticut Attorney General Richard Blumenthal said last week that he is investigating the losses at Amaranth with an eye toward possible misrepresentations the firm may have made to investors. And the U.S. Securities and Exchange Commission has also been discussing the facts behind the Amaranth losses with investors and others, sources have said.

Citigroup