Charles Ergen, EchoStar CEO, said yesterday he acknowledged that News Corporation was in the driver's seat in the bidding for the General Motors-owned broadcaster. However, he did not rule out that he would be mounting his own rival bid.
Ergen is understood to have been keen to buy Hughes, the GM division which is parent of DirecTV, since the business was put up for sale last year by the car giant.
The news comes just days after News Corp chairman Rupert Murdoch managed to re-ignite talks with GM after they almost collapsed due to News Corp's unsatisfactory merger offer.
News Corp has offered to lower its stake in the proposed merged company and give Hughes directors, who aggressively oppose the deal, more control. The new offer will also exclude News Corp's loss-making entities, including Italian pay-TV business Stream, from the deal.
Ergen believes that Hughes investors favour a combination of Hughes and EchoStar. However, such a deal is likely to be opposed by anti-trust authorities which would be unhappy about such a dominant force controlling the US pay-TV market.
Ergen's comments came as the satellite TV operator smashed Wall Street expectations with its first-quarter results, causing its share price to surge 14.33% to close at $36.93 (£25.77) yesterday on Nasdaq.
The company posted increased revenues of $862m (£601.45m) against $566m (£394.92m) for the same period last year.
Net losses narrowed to $75m (£52.33m), excluding a $92m (£64.19m) non-recurring charge to reduce the carrying value of certain strategic investments affected by market changes during the past 12 months. Including this figure, net losses were $167m (£116.52m) against last year's $185m (£129.08m).
EchoStar's Dish Network attracted 460,000 new customers during the quarter, bringing its customer base to 5.72m as of March 31 2001, almost 50% higher than the 3.87m subscribers it recorded a year earlier.