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Jack Grubman: The Power Broker

From his Wall Street perch, he's reshaping telecom and stirring up controversy

In February, 1998, senior executives of SBC Communications Inc. were weighing a decision that would rattle the rafters of the telecom industry: Should they buy Ameritech Corp.? Before they decided, they wanted the advice of Salomon Smith Barney analyst Jack B. Grubman. So they whisked Grubman to a corporate powwow in Scottsdale, Ariz., to get his vision of the industry and what SBC should do to survive. Grubman didn't mince words. He told SBC's top guns that the company needed to get bigger--fast. Sure enough, three months later, SBC ponied up $72 billion for Ameritech and made plans to invade 30 markets outside its territory. "We were very concerned about the Street's reaction to the deal, and we wanted Jack's advice and counsel," says James Kahan, SBC's senior executive vice-president for corporate development.

They're not the only ones. Back in 1997, the lanky Wall Street analyst was hip-deep in plotting with WorldCom Inc. CEO Bernard J. Ebbers for the hostile takeover of MCI Communications. When it came time for Philip A. Anschutz, the railroad magnate, to hire a chief executive for his telecom upstart, Qwest Communications International Inc., whose counsel did he seek? Grubman, who urged the hiring of Joseph P. Nacchio, the tough-talking chief of AT&T's consumer business.