The tobacco executive and investor who became CEO of Borders Group Inc. last month is positioning himself to gain more control of the Ann Arbor-based book store chain.

Bennett LeBow is moving to acquire a stock purchase warrant giving him the right to purchase an additional 35.1 million shares of the company's common stock, according to a news release. He bought 11.1 million shares, or 15.5 percent of the company, in May and was appointed CEO and chairman in June.

LeBow, the company's largest individual shareholder, has not yet spoken to the media or said anything publicly about his vision for the struggling company. But he's widely considered an activist investor.

LeBow took over as CEO of Borders Group in June. Mike Edwards, CEO of Borders Inc., a division of Borders Group, reports to LeBow.

If LeBow acquires 35.1 million additional shares, Borders shareholder and New York hedge fund Pershing Square Capital Management would receive an additional 8.6 million warrants, giving it 26 million total.

If all those warrants were excercised, LeBow would own 35 percent of the company, and Pershing would own 31 percent, Borders spokeswoman Mary Davis said in an e-mail.

Terms of the proposed transaction, structured through the investor's LeBow Gamma Limited Partnership, were included as part of LeBow's original agreement in May to invest $25 million to buy the 11.1 million shares.

Shares of Borders' stock (NYSE: BGP) were up 5.38 percent to $1.37 at 3:01 p.m., though they were trading higher earlier in the day.

Shareholders will vote on the warrant's issuance at a special meeting Sept. 29. It's unlikely voters will reject the proposal due to the structure of the original deal, which would award stock appreciation rights to LeBow if the proposal is rejected.

Shareholders will also be asked to approve a provision that would require the LeBow Gamma Limited Partnership to approve changes in any of the company's top executive positions.

Borders, which is struggling to return to profitability, faces a tenuous long-term future as an independent retailer. In March, the company dodged a bullet by renegotiating its credit facility and paying off a $42.5 million loan to New York hedge fund Pershing Square Capital Management.

The company has recently devoted significant attention to its new electronic books plans. The company yesterday launched its new eBook store, created by Toronto-based Kobo Inc., and said the new Kobo eReader has "surpassed sales expectations."