PARIS (Reuters) - The fate of Accor (>> ACCOR) Chief Executive Dennis Hennequin, beset by growing criticism over his ability to turn around Europe's largest hotel group, will be decided at a board meeting later on Tuesday, sources close to the group said on Tuesday.

French dailies Le Figaro and Les Echos said Hennequin may be ousted by the board and an interim CEO appointed as shareholders lose patience with the weak share performance.

Accor confirmed that it will hold a board meeting later on Tuesday but declined to elaborate further.

"Mr Hennequin does not have the stature to lead a company which needs a real boss," a source close to the company told Reuters.

"A majority of board members are on that wavelength within the board, and it's not just the funds."

Accor's two top shareholders, private equity firm Eurazeo (>> EURAZEO) and U.S. investor Colony Capital, which own a combined 21.4 percent of the capital and command four board seats, want the chain to accelerate the sale of hotels it owns in favour of management contracts or franchises.

Hennequin has also resisted pressure to split its property holdings from its hotel business.

Eurazeo and Colony both declined comment.

ACTIVIST SHAREHOLDERS

Hennequin's departure, if confirmed, is likely to draw once again attention to the role played by these activist shareholders.

Hennequin, the former CEO of McDonald's Europe who took the top job at Accor after his predecessor was ousted in 2010 over "strategic differences" with Accor's board, is blamed for taking too long to overhaul the company, sources said.

If he leaves, Hennequin will be the third chief executive at Accor whose departure has been accelerated by the Eurazeo-Colony alliance, analysts and industry observers said.

"You have markets that are not favourable and very demanding key shareholders who do not leave much time (to the CEO) and a boss who surrounds himself with yes-men and is not too present on the ground," a second source with good knowledge of the company told Reuters.

Accor shares are down 2.75 percent so far this year and the company's market capitalisation at 5.9 billion euros ($7.69 billion) is little more than that of its former unit, meal vouchers company Edenred (>> EDENRED), valued at 5.6 billion euros.

Europe's largest hotel chain said in February it planned to cut costs, expand in emerging markets to offset a downturn in Europe, and accelerate its move toward franchising or managing hotels for others to boost profit margins.

The world's fourth-largest hotelier, which makes over 70 percent of its sales in Europe and is more exposed to the ailing region than its large rivals InterContinental (>> InterContinental Hotels Group PLC), Marriott (>> Marriott International Inc) or Starwood , has unveiled a plan to boost its operating margin to over 15 percent by 2016 from 9.3 percent last year.

"The fact that Dennis Hennequin engaged Accor in a four-year transformation plan may appear as not matching the urgency of the situation with a very tense economic climate in Europe," CM-CIC analyst Annick Thevenon said in a note.

By 1316 GMT, Accor shares were off 0.16 percent, having declined as much as 2.5 percent earlier in the day.

"Ousting Dennis Hennequin would add to uncertainty and risk further slowing the restructuring of the group," a Paris trader cautioned.

(= 0.7674 euros)

(Reporting by Christian Plumb, Alexandre Boksenbaum-Granier and Dominique Vidalon; Editing by David Cowell)

By Cyril Altmeyer