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NEW YORK (CNNMoney.com) -- The largest shareholder of bookstore chain Borders, investor William Ackman of Pershing Square Capital Management, is willing to shell out $900 million to takeover rival Barnes & Noble Inc., according to a regulatory filing.
Ackman said Pershing Square Capital Management, which holds a 15% stake in Borders, is prepared to bid $16 per share in an all-cash or stock-and-cash transaction, representing a 20% premium on Barnes & Noble's closing price of $13.28 last Friday.
Shares of Barnes & Noble (BKS, Fortune 500) rallied 17% to $15.50 in afternoon trading, while Borders Group's (BGP) stock surged more than 40% to $1.52 per share.
Barnes & Noble put itself up for sale in August, saying its shares were "significantly undervalued." The company's stock value has plunged more than 30% this year.
At the time, the bookseller's founder and largest shareholder Leonard Riggio said he might join an investor group to buy Barnes & Noble. 
| Index | Last | Change | % Change |
|---|---|---|---|
| Dow | 15,343.07 | -11.33 | -0.07% |
| Nasdaq | 3,493.88 | -5.09 | -0.15% |
| S&P 500 | 1,666.61 | -0.86 | -0.05% |
| Treasuries | 1.95 | 0.00 | 0.15% |
| Company | Price | Change | % Change |
|---|---|---|---|
| Bank of America Corp... | 13.52 | 0.09 | 0.67% |
| Cisco Systems Inc | 23.66 | -0.58 | -2.39% |
| Microsoft Corp | 34.86 | -0.01 | -0.04% |
| Advanced Micro Devic... | 4.10 | 0.04 | 0.86% |
| Ford Motor Co | 15.04 | -0.04 | -0.27% |
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