Borders AND Ackman Get Together

Major activist investor Bill Ackman (pictured at left) and bookseller Borders Group Inc. have reached a compromise--for now. On Friday, the Ann Arbor, Mich.-based bookstore chain named Richard McGuire, a partner in Ackman's activist fund, Pershing Square Capital Management LP, to its board. Pershing Square has an 18% Borders stake.
Ackman's public campaign at Borders launched in 2006, when Ackman expressed at an investor conference that the company' stock price could be higher. But Pershing Square really launched its campaign when Ackman in October expressed in an SEC filing that he could consider electing a slate of directors. In the filing, Ackman indicated that he wants to shake up the executive suites and to tinker with the company's restructuring plan. At the time, he held an 11.7% stake.
Borders isn't the only retailer currently in Ackman's sites. Discount retailer Target is also facing an activist push from Pershing, but so far Ackman hasn't threatened to elect a slate of directors. Instead, he reportedly is pushing for sales of Target's credit card business and real estate. - Ron Orol