WorldCom Enlisted Grubman in MCI Takeover
Updated from 1 p.m. EDT
It seems Jack Grubman, Salomon Smith Barney's embattled telecom analyst, did a bit more than attend three WorldCom(WCOME Quote) board meetings and spend some of his free time rubbing shoulders with Bernard Ebbers.
Back in 1997, when WorldCom was locked in a heated battle with British Telecommunications(BTY Quote) to acquire MCI Communications, Grubman served as one of WorldCom's official solicitors of shareholder proxies in the contest ultimately won by WorldCom. Joining Grubman in that important task were six Salomon investment banking executives.
Salomon, which is owned by Citigroup (C Quote), served as WorldCom's principal financial adviser in the telecom deal. And ever since, Salomon has been WorldCom's main bond underwriter. Grubman, meanwhile, gained a reputation on the Street as one of WorldCom's biggest boosters, often referring to it as a "must-own stock" in research reports. He's acknowledged having a friendly relationship with Ebbers.
Little Precedent
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