Ann Arbor-based Borders Group Inc. plans to reveal its third-quarter financial results late this afternoon, and analysts are watching to see whether the company addresses a proposal by one of its largest shareholders that the company pursue an acquisition of rival Barnes & Noble.

Borders released a statement Monday suggesting that it views a possible merger with Barnes & Noble favorably.

Barnes & Noble, however, has not addressed news that New York hedge fund manager Bill Ackman, who owns about 37 percent of Borders' stock through Pershing Square Capital Management, is willing to help finance an acquisition of Barnes & Noble.

After Ackman's proposal surfaced in a regulatory filing with the Securities and Exchange Commission, book store industry experts suggested that a deal was unlikely, if only because Barnes & Noble is financially healthier.

Publishing industry analyst Michael Norris of Maryland-based Simba Information said in a statement Wednesday that he couldn't "think of a single good thing that would come about from a Borders-Noble merged entity."

He suggested it would take "years" for the two companies to consolidate their stores and operating systems.

However, reaction to a proposed deal was not altogether negative. Jim McTevia, a turnaround consultant with Bingham Farms-based McTevia & Associates, told AnnArbor.com that he liked the idea.

"It's a necessary first step in the survival of Barnes & Noble, and I've always said that Borders is ultimately going to go by the wayside," he said. "It's just not in the cards that the two giants are going to stand toe by toe and hit each other over the head. Sooner or later one of them is going to crumble."

Investors, too, seemed open to the concept of a merger between the physical store competitors, which are struggling to compete in a pricing war with Walmart, Target and Amazon.com.

Borders' stock (NYSE: BGP) closed at $1.38 on Wednesday, up from $1.08 on Friday. Barnes & Noble shares (NYSE: BKS) closed at $15.00 on Wednesday, up from $13.28 on Friday.

It's unclear how a merger between Borders and Barnes & Noble would play out. Barnes & Noble is considered the more stable company, but cuts to personnel and stores would be likely on both sides.

Borders employs about 600 people at its Ann Arbor headquarters and more than 19,000 worldwide.

In its second fiscal quarter, which ended July 31, Borders reported that its sales slipped 11.5 percent to $526.1 million. Sales at stores open at least a year declined 6.8 percent over the same period, and the company reported a loss of $46.7 million.

Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.