Pegasus Communications stock rose 1.32% in midday trading on Fri....

company. It had climbed $2.34 Thurs. to $19. Pegasus spokesman said possible settlement “could take any form” ranging from resolving individual issues to “merger or acquisition.” DirecTV spokesman confirmed mediation, but declined comment on possible purchase. Pegasus, along with NRTC, sued DirecTV in U.S. Dist. Court, L.A., in 1999 alleging breach of contract and interfering with relationships with manufacturers and dealers. NRTC, of which Pegasus is member, sued to enforce contract requiring that DirecTV continue providing premium programming previously supplied by U.S. Satellite Bcstg. (USSB). DirecTV purchased USSB in 1999. As result of mediation, start of trial in case was postponed to June 3 from April 1. Pegasus has long been seen as possible acquisition target of DirecTV’s since it sells service in NRTC territories where it has about 1.3 million customers. DirecTV’s interest in resolving lawsuits involving Pegasus and NRTC comes as General Motors seeks to sell majority stake in Hughes. Hughes’ proposed $18 billion sale to EchoStar collapsed last fall after FCC rejected deal, but News Corp. and SBC Communications have since emerged as possible suitors. Pegasus’ ties to DirecTV date to launching of service. NRTC bought rights to sell DirecTV in its territories for $100 million in 1992. Pegasus emerged as largest DirecTV distributor in NRTC territories as it rolled up string of purchases capped by acquisition of rival Golden Sky in late 1990s. Not part of mediation is separate suit DirecTV filed against Pegasus in L.A. Superior Court in July 2001 for allegedly breaching terms of seamless marketing agreement signed previous year. DirecTV ceased paying commissions in NRTC territories year-ago and Pegasus has moved to strike direct sales agreements with dealers including RadioShack franchisees.