Pershing Square, run by William Ackman, is a very concentrated fund known for its activism, holding shares in only four companies: McDonald's (MCD), Ceridian (CEN), Borders Group, and Barnes and Noble. Both McDonald's and Ceridian's management teams have been subject to intense pressure by activist shareholders to restructure their respective companies.
I have not seen any groups recently target Borders or Barnes and Noble, but the combination of the new firms makes sense.
Barnes and Nobles and Borders Group are the number #1 and #2 big box book stores in the country. There would be considerable cost savings in merging the two companies with respect to distribution, management, along with the increased purchasing power. Each company's online presence is still not competitive and they might fare better combined.
Barnes and Noble and Borders Group together would be a much stronger competitor to the likes of Amazon (AMZN) than they are apart. With Pershing Capital Management focusing attention on the two companies, the talk of a merger or partnership will surely become louder.
BGP vs. BKS 1-yr chart