Form 4 BORDERS GROUP INC For: Oct 01 Filed by: ACKMAN WILLIAM A (10K)

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

Pershing Square Capital Management, L.P.

(Last)

(First)

(Middle)

888 SEVENTH AVENUE, 29TH FLOOR

(Street)

NEW YORK

10019

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
BORDERS GROUP INC [BGP]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

Director	X	10% Owner
Officer (give title below)		Other (specify below)

3. Date of Earliest Transaction (Month/Day/Year)
10/01/2008

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

	Form filed by One Reporting Person
X	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
			Code	V	Amount	(A) or (D)	Price

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security
(Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code
(Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date
(Month/Day/Year)

7. Title and Amount of Underlying Securities
(Instr. 3 and 4)

8. Price of Derivative Security
(Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I)
(Instr. 4)

11. Nature of Indirect Beneficial Ownership
(Instr. 4)

Code

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Warrants to purchase shares of common stock

$ 7

10/01/2008

J⁽¹⁾

5,150,000

10/01/2008⁽²⁾

10/09/2017

Common Stock

5,150,000

⁽¹⁾

5,150,000

See footnotes 3 and 4 and 5 ⁽³⁾ ⁽⁴⁾ ⁽⁵⁾

1. Name and Address of Reporting Person^*

Pershing Square Capital Management, L.P.

(Last)

(First)

(Middle)

888 SEVENTH AVENUE, 29TH FLOOR

(Street)

NEW YORK

10019

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

PS Management GP, LLC

(Last)

(First)

(Middle)

888 SEVENTH AVENUE, 29TH FLOOR

(Street)

NEW YORK

10019

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

Pershing Square GP, LLC

(Last)

(First)

(Middle)

888 SEVENTH AVENUE, 29TH FLOOR

(Street)

NEW YORK

10019

(City)

(State)

(Zip)

1. Name and Address of Reporting Person^*

ACKMAN WILLIAM A

(Last)

(First)

(Middle)

888 SEVENTH AVENUE, 29TH FLOOR

(Street)

NEW YORK

10019

(City)

(State)

(Zip)

Explanation of Responses:

1. In accordance with the terms of the Warrant Agreement referred to in Amendment No. 7 to Schedule 13D filed April 14, 2008 by PS Capital, and as consideration for certain transactions described therein, PS I, PSII and BGP (defined below) received warrants to purchase an aggregate of 5,150,000 shares of common stock.

2. PS Capital has agreed not to exercise any warrants or transfer any warrants or shares of common stock of the Issuer until the earlier of (i) January 1, 2009 and (ii) the public announcement of the Issuer's entry into a definitive agreement with respect to, or the completion of, a change of control or other extraordinary transaction involving the Issuer to which PS Capital is not a party, and not to exercise warrants if that would cause a "change of control" under the Issuer's existing credit facility.

3. In addition to Pershing Square Capital Management, L.P. ("PS Capital"), this Form 4 is being filed jointly by PS Management GP, LLC ("PS Management"), Pershing Square GP, LLC ("PSGP") and William A. Ackman, each of whom has the same business address as PS Capital and may be deemed to have a pecuniary interest in securities beneficially owned by the investment funds referred to herein.

4. Represents 2,039,600 warrants beneficially owned by Pershing Square, L.P. ("PS"), 28,100 warrants beneficially owned by Pershing Square II, L.P. ("PSII") and 3,082,300 warrants beneficially owned by BGP Holdings Corp. ("BGP"). Each of PSI and PSII is an investment fund for which PS Capital acts as investment adviser and may be deemed the beneficial owner of securities beneficially owned by it. Each of PSI and PSII has ownership interests in BGP and may be deemed beneficial owners of securities beneficially owned by it.

5. PS Management is general partner of PS Capital and may be deemed beneficial owner of securities beneficially owned by it. PSGP is general partner of PSI and PSII and may be deemed beneficial owner of securities beneficially owned by them. Mr. Ackman is the managing member of PSGP and PS Management and may be deemed beneficial owner of securities beneficially owned by them. Each of PS Capital, PS Management, PSGP and Mr. Ackman disclaims beneficial ownership of the securities reported hereon except to the extent of its or his pecuniary interest therein.

	PERSHING SQUARE CAPITAL MANAGEMENT, L.P., By: PS Management GP, LLC, its General Partner, /s/ William A. Ackman, Managing Director	10/03/2008
	PS MANAGEMENT GP, LLC, /s/ William A. Ackman, Managing Member	10/03/2008
	PERSHING SQUARE GP, LLC, /s/ William A. Ackman, Managing Member	10/03/2008
	/s/ William A. Ackman	10/03/2008
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4(b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
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