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NEW YORK-The future of AC&R will be determined in coming months as Backer Spielvogel Bates Worldwide CEO Michael Bungey turns his attention to the low-profile BSB unit.

Mr. Bungey, whose mandate from BSB parent Saatchi & Saatchi Co. is to quickly shore up all agency operations, is said to have begun discussions about the future ownership and structure of AC&R, a 29-year-old agency that bills about $180 million.

Although executives familiar with AC&R operations said the agency is profitable, almost half of its fortunes come from cornerstone account Estee Lauder Cos. AC&R's relationship with that client has been precarious for some time as rumors resurface about the impending retirement of agency Chairman Alvin Chereskin, who has yet to groom a creative successor to handle the business.

Executives say the task that faces Mr. Bungey is a difficult one: An AC&R merger with BSB has been discussed, but Lauder is said to be reluctant to be folded into a large agency system.

Mr. Bungey is now said to be considering a deal that would include an outside group or investor, an arrangement that would need to occur while Lauder is still safely held by the shop.

AC&R principals last year discussed buying the agency and its New York office building from parent Saatchi, but an executive familiar with those plans said talks fell apart when the parties couldn't agree on financial terms for a buyback.

Mr. Bungey denied having any concrete plans for the unit of BSB.

"I constantly review what's going on with AC&R," he said. "I am going to get some focus on it because I have to find a role for it in the group."

AC&R Vice Chairman-Chief Operating Officer Harry Koenig refused comment.

Since his appointment by Saatchi last year the seemingly low-key Mr. Bungey has orchestrated sweeping changes at BSB.

Some moves-such as the appointment of several high-level Brits, an executive purge in the agency's financial department and an impending name change to Bates Worldwide-are said to have rankled longtime BSB brass, including Chairman Carl Spielvogel.

Other industry observers, however, champion the speedy moves in an industry where promises of agency re-engineering often result in very little action.

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