Borders Group Inc
Borders shares rose 41 cents to $1.35 in morning 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 also said that Borders could end up being involved in a consolidation in the bookselling industry, perhaps even with bigger rival Barnes & Noble Inc
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 Companies 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 9 cents at $19.49 on the New York Stock Exchange.
(Reporting by Phil Wahba, editing by Dave Zimmerman)