PARIS (Reuters) - French media giant Vivendi will accelerate acquisitions in video games and advertising this year to allay investor concerns about its strategy, mixed results and poor share performance, two sources close to the matter told Reuters.

The Vivendi logo is pictured at the main entrance of the entertainment-to-telecoms conglomerate headquarters in Paris, March 10, 2016. REUTERS/Charles Platiau/File Photo

Advertising group Havas and video games maker Ubisoft are expected to be the first targets as Vivendi moves into the next phase of its expansion, the sources said.

In three years, Chairman Vincent Bollore has spent nearly 15 billion euros ($16 billion) of Vivendi’s cash on shareholders and acquisitions, including taking large stakes in Telecom Italia and Italian broadcaster Mediaset.

Yet Vivendi’s shares have fallen by about 3 percent over the period and analysts are still awaiting more details from the company about how exactly its strategy will pan out.

Bollore is expected to defend his record at an annual shareholders meeting on Tuesday in Paris, a rare occasion for the billionaire to flesh out his plan to turn Vivendi into an integrated European media powerhouse.

On paper, merging Havas with Vivendi would be the easiest deal as the ad company is 60 percent owned by Bollore and run by his son Yannick, who joined Vivendi’s board last year. Bollore is also Vivendi’s biggest shareholder with 20.65 percent.

In the case of Ubisoft, which is 25 percent owned by Vivendi, resistance from its founding Guillemot family could potentially lead to a costly, unsolicited full takeover bid.

“Vivendi is moving to the second phase, everything will take place this year,” one of the sources said, referring to Havas and Ubisoft.

“The logical thing would be to buy Ubisoft,” the second source said, adding that Bollore would not buy the video games maker at any price and could consider other targets in China.

ITALIAN SETBACKS

Bollore, a 65-year-old businessman who made his fortune by building a family-run conglomerate with activities from logistics to electric batteries to advertising, is known for his capacity to turn businesses around and make shrewd investments.

But he has suffered a series of setbacks lately in Italy, a country he knows well through his investment bank in Mediobanca, raising questions about his capacity to deliver a rapid return on investments there and his long-term strategy.

“The lack of visibility over Vivendi’s intentions regarding its existing stakes (Telecom Italia, Mediaset) and a potential acquisition of Havas could remain an overhang on Vivendi’s share price in the near term,” Lisa Yang, an analyst at Goldman Sachs, said in a note to clients this month.

Other analysts said Vivendi needed to lay out its strategy with greater clarity to attract new investors.

“Any increased transparency on investment policy, strategic view on ownership of telecom companies, and the vague Southern European strategy and vision for gaming stakes would be very welcome to existing and potential new shareholders,” Deutsche Bank said in a note.

An Italian regulator ordered Vivendi last week to cut its stake in either Telecom Italia or Mediaset within a year, ruling that the French company was in breach of rules designed to prevent a concentration of corporate power.

FRENCH WOES

In France, competition for TV sports rights, including those for Formula One and the Champions League, is expected to be cut-throat and analysts worry that Vivendi’s pay-TV subsidiary Canal Plus could lose them to rivals such as SFR Group.

Any such loss would just add to the difficulties at Canal Plus in France. Losses at the pay-TV’s channels in that country alone cut 399 million euros ($434 million) off the group’s core operating profit for 2016.

However, Vivendi expects Canal Plus’ turnaround efforts to bear fruit in 2017 and it is targeting a 25 percent rebound in group core operating profit. It also expects group revenues to rise by more than 5 percent.

Questions are also being raised about Vivendi’s governance. Proxy adviser ISS is recommending that shareholders oppose the re-election of Bollore and the appointment of his son Yannick as board members.

ISS has cited concerns about the lack of independence of the company’s board and opposed 15 out of 25 resolutions that have been proposed ahead of Tuesday’s annual general meeting.

The last time Vivendi was challenged by a minority shareholder was in 2015. U.S. hedge fund P. Schoenfeld Asset Management (PSAM) campaigned over Vivendi’s perceived lack of transparency, unclear strategy and poor governance, but shelved those concerns after wringing more money from the company.

Vivendi agreed to increase payouts to investors by more than 1 billion euros following the investor’s campaign.