Borders Group Inc
Borders shares rose 36 cents to $1.30 in trading on the New York Stock Exchange, and had reached as high as $1.43 earlier in the session.
Ackman's Pershing Square Capital Management owns 17.7 percent of the No. 2 U.S. bricks-and-mortar bookseller.
He said the possibility that Borders would go bankrupt was a low probability event during an interview with cable business channel CNBC late on Tuesday.
Ackman's remarks reassured investors about Borders' short-term prospects despite dwindling sales, an analyst said.
Having someone come out and publicly make those comments does help soothe fears that the company's going to file for bankruptcy imminently, said Michael Souers, an analyst with S&P Equity Research.
Pershing Square made a $42.5 million senior secured loan, which carries a 9.8 percent interest rate, to Borders, which has to be paid back on April 1; and Souers took Ackman's comments with a grain of salt, saying it was in Ackman's interest for Borders to stay in business.
Souers also doubts Borders would be an attractive takeover target for Barnes & Noble Inc
Barnes & Noble declined to comment on the possibility of a tie-up.
These companies have a lot of redundant store locations, Souers said. They'd probably prefer to see Borders go out of business at some point.
Borders has contended with sharply falling sales for about two years and its CEO quit last week after only a year at the helm. Comparable sales at Borders' namesake superstores fell 14.6 percent during the 11-week holiday period ended January 16.
Earlier this week, billionaire investor Ronald Burkle, whose Yucaipa Cos is one of Barnes & Noble's largest shareholders with an 18.7 percent stake, asked that company's board for permission to double his stake without tripping the poison pill provisions meant to thwart any hostile takeover.
Barnes & Noble shares were up 25 cents at $19.65 on the New York Stock Exchange.
(Reporting by Phil Wahba, editing by Dave Zimmerman and Gerald E. McCormick)