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By Bloomberg

European stocks fell for a third day as euro-area leaders told their finance ministers to find a solution to the Greek debt impasse at last-ditch weekend talks.

The Stoxx Europe 600 Index retreated 0.6 percent to 394.19 at 8:40 a.m. in London, paring its weekly gain to 2.2 percent. Stocks extended a selloff Thursday as the region’s leaders differed on how Greek discussions were progressing. French President Francois Hollande held out hope of a deal, while German Chancellor Angel Merkel said talks looked to be going backward.

Finance ministers reconvene Saturday after the failure of Thursday’s negotiations. Merkel said the weekend gathering will be decisive. Differences over pensions, sales-tax rates, debt relief and corporate taxes are the main sticking points.

With no follow-on financing in place, Greece may struggle to pay 1.5 billion euros ($1.7 billion) it owes the International Monetary Fund at the end of the month. Failure to close a deal by the weekend raises the odds that Greece might have to impose capital controls to prevent a run on its banks.

Among stocks moving on corporate news, ARM Holdings Plc dropped 3.2 percent after Sanford C. Bernstein cut its rating on the chip designer to underperform, similar to sell.

Petrofac Ltd. declined 2.9 percent after Deutsche Bank AG recommended investors sell shares of the builder and operator of oil and gas facilities.

K+S AG soared 32 percent. People familiar with the matter said the German potash supplier is likely to reject a takeover offer from Canadian fertilizer producer Potash Corp. of Saskatchewan Inc. because it deems the bid to be too low.

Tesco Plc added 3.4 percent after the U.K.’s biggest supermarket chain posted a smaller-than-forecast decline in quarterly sales. J Sainsbury Plc rose 2.4 percent and Wm Morrison Supermarkets Plc gained 1.1 percent.