By Jonathan Spicer and Paritosh Bansal
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A number of interested parties were considering several possible deals, including buying all or parts of the troubled U.S. futures brokerage run by former Goldman Chief Executive Jon Corzine, said the source, who requested anonymity.
"The goal is squarely for some sort of M&A transaction," the source said, adding the situation was "fluid".
MF Global declined to comment.
The pressure is on the company after a week in which it posted a quarterly loss, its shares fell by two-thirds and its credit ratings were cut to junk.
Corzine, who became CEO in March last year after a term as New Jersey's governor, has been trying to transform MF Global from a brokerage that mainly places customers' trades on exchanges into an investment bank that bets with its own capital.
MF Global is now suffering because of low interest rates and bets it made on European sovereign debt, and it is emerging as one of the hardest-hit U.S. financial firms in the fallout from Europe's economic crisis.
The plunge last week in MF Global's corporate bonds to distressed levels, and in its shares to below $1 at one point on Friday, makes it all the more urgent for the company to come up with some sort of solution before markets open on Monday.
It was unclear how close the company was to a possible deal as discussions stretched through the weekend, and there could be hurdles in the way of such hasty dealmaking.
MF Global has given potential buyers limited information about its financials and has not set up a data room for bidders to conduct due diligence, a buyside source said.
The source, who is looking into deals both for the whole company and for its parts, said he was skeptical about the possibility of MF Global striking a deal over this weekend.
The company's positions are big and hard to value, especially the firm's sovereign risk exposure, the source said.
"How do you put a price on that? How do you get a deal done when the right side of the balance sheet keeps moving so dramatically?" the source said.
The company hired boutique investment bank Evercore Partners Inc to help find a buyer, separate sources said this past week.
It reached out to banks including Barclays Plc, Citigroup Inc, Deutsche Bank, Jefferies Group Inc, JPMorgan Chase & Co, Macquarie Group Ltd, State Street Corp and Wells Fargo, a source familiar with the situation said on Friday.
Private equity firm J.C. Flowers, which has a stake in MF Global, is also in talks about possibly taking it private, the Wall Street Journal reported on Friday.
The investment is the latest to go sour for the financial services-focused buyout shop, founded by ex-Goldman Sachs banker J. Christopher Flowers. Earlier this year, the firm was among investors who failed to block the nationalization of German mortgage bank Hypo Real Estate.
MF Global, which runs a Futures Commission Merchant and a broker-dealer, was scrambling last week to reassure customers about its stability as signs grew that some of them were withdrawing money.
A drop in a broker's credit rating to junk erodes confidence in its creditworthiness and can then restrict its ability to borrow -- the bedrock of any financial institution -- and fund day-to-day operations.
(Editing by Dale Hudson)