Paris, Aug 26: The multi-billion dollar auction of Vivendi Universal's showbiz empire headed into a crucial phase on Monday with Liberty Media Corp. dropping its bid, thus narrowing the once formidable pack of contenders to two lone rivals. The auction of Hollywood properties including Universal Studios and the USA and Sci Fi cable TV networks now shapes up as a horse race between TV network NBC, owned by General Electric Co., and investors led by Vivendi vice chairman Edgar Bronfman Jr., said sources familiar with the auction.

Liberty, the Colorado-based cable TV investment company run by John Malone, formally withdrew its offer Monday saying the value it could achieve in a purchase would not add up to the $14 billion sources have said Vivendi is seeking.

"The synergy opportunities with our other businesses are not sufficient to support the expected transaction value," Liberty President Robert Bennett said. NBC -- seen as the leading contender -- sent Vivendi a letter on Saturday detailing a merger proposal that helps solve Vivendi's cash needs, a source familiar with the auction said.

However, Bronfman -- who ran the Universal empire when his family owned it -- has been snapping at NBC's heels with a deal that would offer Vivendi more immediate cash to cut the debt.

Charged with getting Vivendi back on its feet after an acquisition spree by former chief Jean-Marie Messier landed the company in financial straits, Vivendi chief executive Jean Rene Fourtou kicked off one of the media industry's biggest auctions ever in May to untangle Vivendi from Hollywood and Universal. Bureau Report