Japanese convenience retailer Seven & i Holdings lowered its profit forecasts and advanced restructuring plans that included spinning off non-core businesses into a standalone subsidiary.

The company cut its profit forecast for the fiscal year ending February 2025 and now expects net profit of 163 billion yen ($1.09 billion), down 44.4% from its previous forecast of 293 billion yen. The decline comes as the company reported first-half net profit of 52.24 billion yen on revenue of 6.04 trillion yen. While sales were higher than forecast, profit was well below its own forecast of 111 billion yen.

Seven & i said it was seeing fewer customers in its overseas convenience stores as it took a “more cautious approach to consumption”. The company said it recorded a 45.88 billion yen charge related to the spin-off of online supermarket Ito-Yokado.

In a separate filing, the owner of 7-Eleven said it would create an intermediate holding company for its supermarket grocery, specialty store and other businesses amid growing pressure from investors to shrink its portfolio.

The restructuring, This would result in a consolidation of 31 units as the Japanese retailer resists a takeover attempt by Canada Alimentation Couche-Tard.

In September, Seven & i rejected the initial takeover offer of $14.86 per share, saying the offer was “not in the best interests” of its shareholders and stakeholders and also citing concerns about U.S. antitrust law.

After receiving this proposal, Seven & i applied for and received a new designation as a “core business” in Japan. Under Japan’s Foreign Exchange and Foreign Trade Law, foreign companies must notify the government and undergo a national security review if they acquire a 1% or more stake in a particular company.

Seven & i confirmed on Wednesday that it had received a revised offer from ACT, but gave no further details. Bloomberg previously reported that the Canadian operator of Circle K stores increased its offer by about 20% to $18.19 per share, which would value Seven and i at 7 trillion Japanese yen. If completed, the deal could become the largest foreign acquisition of a Japanese company ever.

It’s “entirely possible” that ACT’s tender offer turns into a hostile takeover attempt, Nicholas Smith, a Japan strategist at CLSA, told CNBC’s “Squawk Box Asia” on Thursday. A hostile takeover occurs when an acquiring company attempts to gain control of the target company against the wishes of its management and board of directors.

“We have had many problems with poison pills in Japan in recent years and the legal structure is extremely opaque,” ​​he added. Companies trying to shake off a buyer may decide to use a “poison pill” by issuing additional stock options to dilute the attempted buyer’s stake.

“However, a completely hostile takeover bid would be highly unlikely,” says Jamie Halse, founder and managing director of Senjin Capital, as no bank would be willing to provide financing.

However, if the offer reaches a “sufficiently attractive level,” it could be difficult for the board to continue rejecting it, he said.

“Shareholders are likely already frustrated that no further negotiations have taken place despite the increase in the offer price,” he said, adding that an activist investor could seek to “take advantage of these frustrations” and “seek a change in the composition of the board to bring about”.

Shares in Seven & i were trading at 2,325 Japanese yen at the close on Thursday. The Tokyo-listed shares have risen over 33% since the Canadian company’s takeover interest became public in August.

ACT has around 16,800 branches worldwide, far fewer than the around 85,800 branches of Seven & i Holdings.

The newly revised offer shows that ACT executives are “committed,” Jesper Koll, head of Japan at Monex Group, told CNBC by email. He also noted that the new offering price suggests a 53% premium to the price at which the shares traded before the initial offering.

“The money they’re offering is good, but it’s about more than just numbers,” Koll said.

“I really can’t see ACT increasing its price,” Amir Anvarzadeh, a Japanese stock market strategist at Asymmetric Advisors, told CNBC, “The pressure is on Seven & i’s management to prove they can speed things up and be able to remain independent.”