Home Depot is close to accepting about $1.2 billion less for the sale of its wholesale distribution business to three private equity firms, the Wall Street Journal reported on Thursday.

But the deal may not close before a Thursday deadline, with the three major financiers -- JP Morgan Chase & Co, Lehman Brothers Holdings Inc and Merrill Lynch & Co Inc -- balking over the financing, the Journal reported on its Web site, citing people familiar with the matter.

The banks were preparing for the possibility of lawsuits, the Journal reported, without saying whom they would sue.

The Journal said some of the most senior figures on Wall Street were trying to manage their exposure to a deal beset by crises in the housing and credit markets, the Journal reported.

There has been a flurry of negotiations to save the transaction, the Journal reported.

Three private equity buyers -- Bain Capital, Carlyle Group and Clayton, Dubilier & Rice -- originally agreed to pay $10.3 billion for the deal.

A Home Depot spokeswoman was not available for comment.