NEW YORK (Reuters) - Borders Group Inc said shareholders approved issuing warrants to Chief Executive Bennett LeBow that could give him a stake of as much as 35 percent in the No. 2 U.S. bookstore chain.
LeBow bought 11.1 million shares, or a 15.5 percent stake in Borders in May, leaping past William Ackman's Pershing Square Capital Management to become its largest shareholder, in exchange for a $25 million cash infusion.
Pershing Square got 2.7 million warrants with an exercise price of 65 cents after LeBow's investment, and will get another 8.6 million if LeBow exercises his warrants.
If both parties exercise all their warrants, LeBow's stake in Borders would be 35 percent, and Pershing Square's 31.1 percent.
LeBow's warrants to buy 35.1 million shares have a strike price of $2.25.
Shares were up 6 cents in afterhours trading after closing at $1.19 on Thursday on the New York Stock Exchange.
Borders shares have fallen 64 percent since hitting a yearly high of $3.34 on October 12.
(Reporting by Phil Wahba. Editing by Robert MacMillan)
