CNNMoney.com – Activist investor William Ackman, who heads Pershing Square Capital Management, said on Thursday the fund has bought more than 11 percent of book retailer Borders Group Inc.’s shares.
Borders (up $2.11 to $23.65, Charts) stock rose nearly 12 percent in early trading.
The shares could be worth more than $36 apiece, more than 50 percent above than their current value, in the next 18 months, Ackman said.
“The stock is cheap in our opinion,” Ackman told investors at a New York conference. He also noted that the company’s share repurchases have been “aggressive.”
Ackman, who also owns shares of Borders’ larger rival, Barnes & Noble Inc (down $0.14 to $42.04, Charts)., said that there are rumors of leveraged buyouts of both booksellers “for good reason.”
A spokeswoman for Borders could not immediately comment.
