Wyndham rejects Choice buyout, Adidas, Chesapeake Energy: Top Stocks

Wyndham Hotels & Resorts (WH) rejects Choice Hotels International's (CHH) $7.8 billion buyout bid. Athleticwear brand Adidas (ADDYY) is raising its guidance for the second time in three months on boosted sales tied to its Yeezy brand, previously affiliated with rapper Kanye West.

Lastly, Chesapeake Energy (CHK) is exploring an acquisition of Southwestern Energy (SWN), according to a Reuters report.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JOSH LIPTON: Let's take a look at some trending tickers in today's trade. Shares of Wyndham and Choice Hotels both on the move today after Wyndham rejected a $7.8 billion takeover offer from Choice, calling the proposal underwhelming and opportunistic.

So Choice Hotels, Julie, they make this unsolicited bid for Wyndham for nearly $8 billion. I did hear Choice's CEO on another network, and his argument was, basically, this combination, he said, through direct bookings, lower operating costs, stronger rewards program, should help owners of its franchises improve the value of their assets and the return on investments. Wyndham today, you can see, surging higher, but it's-- but around that price, around 75, you're still, of course, well below the $90 deal price.

JULIE HYMAN: Right, and it's interesting because there is some analyst chatter that, oh, maybe Wyndham is holding out for either a higher price from Choice or from another suitor entirely, but the market's not reflecting confidence that they'll be able to get a meaningful higher price, that you would see the stock trading up by more. These are two of the biggest players in the discount hotel space, which has really been booming, as we've seen this big travel come back.

So it's interesting to see this happen. It would also be, I believe, the biggest hotel tie-up since Marriott and Starwood, although that was on-- in a different sort of tier price wise, you could argue. But we'll see what happens here. Wyndham has more than 9,000 hotels. Choice has about 7,500 dollar hotels, so talking about a lot of hotels between the two of them.

JOSH LIPTON: What to watch.

JULIE HYMAN: Exactly. Let's talk about Adidas, too. The company's US shares, we are watching those. They're popping today by about 3 and 1/2% after the athletic apparel company boosted its guidance for a second time in three months, driven by a batch of Yeezy sneaker sales. Now, this news breaking after the close of markets in Europe. And so that's why we're watching these US shares here today.

Of course, the company was left with a lot of Yeezy merchandise after terminating its partnership with Ye and initially had written down a lot of that merchandise. But the writedown is shrinking because they're selling more of it. So now saying their operating loss will be a little over $100 million or the equivalent of 100 million euros.

JOSH LIPTON: Better than what it had predicted.

JULIE HYMAN: Better than what it had predicted.

JOSH LIPTON: Yeah, so it does sound like, I think, Yeezy sneakers, as you mentioned, they canceled that partnership with the rapper after he made these series of anti-Jewish remarks last fall. But they're still selling, I guess, Julie, the shoes they have left. And the company, we should mention the company did say they're going to donate what they call a significant amount of the proceeds. Not sure exactly that amount, but they call it a significant amount to charities.

JULIE HYMAN: Right, and so now the writedown of the inventory they have left is now about 300 million euros from 400 million euros previously, but they've done a couple of drops of product. And so that's where they got this bump from.

JOSH LIPTON: Yeah, investors like it. We'll end here on shares of Chesapeake Energy-- check these out-- and Southwestern Energy both on the move after natural gas producer Chesapeake approached Southwestern with an acquisition offer worth $11 billion. That's according to Reuters. So these are reports. We're going to pin them on Reuters for now.

And folks are pointing out, Julie, the combined company-- let's say this happens-- would overtake EQT as actually the largest US natural gas producer, at least by market cap. And these two, I'm reading, are also neighbors. So they're most of Southwestern's production in Appalachia, Louisiana, where, apparently, Chesapeake also operates.

JULIE HYMAN: Yeah, Chesapeake has been an interesting story to watch over the past few years. It emerged from bankruptcy in 2021. And it's been getting rid of most of its oil production assets and really focusing in on natural gas. At one point, Southwestern also bought some assets from Chesapeake.

So obviously, the two have done business together before. Reuters is saying that these are preliminary talks. It might not end up bearing any fruit. They might not end up doing a deal. But it's interesting in that gas coming on the heels of Exxon's purchase of Pioneer, a much larger deal to be sure, but more tie-ups happening potentially in the industry.

JOSH LIPTON: You are right to put that qualifier because Reuters does emphasize Chesapeake has been studying other potential acquisitions. May, of course, decide to pursue a totally different target at the end of the day.

JULIE HYMAN: Obviously, investors are reacting today, though.

JOSH LIPTON: Yeah, they like what they see.

JULIE HYMAN: They're buying Southwestern shares--