July 13 (Bloomberg) -- Barclays Plc moved a step closer to buying ABN Amro Holding NV, the biggest Dutch bank, for 63.9 billion euros ($88.1 billion) after a court cleared ABN Amro's sale of LaSalle Bank.

The Dutch Supreme Court today said there were ``no grounds'' to block the sale, overturning a lower court ruling that said ABN Amro should have asked shareholders to approve its $21 billion disposal of Chicago-based LaSalle to Bank of America Corp. The decision removes an obstacle to Barclays's agreement to buy the rest of Amsterdam-based ABN Amro in the biggest banking takeover.

ABN Amro would make Barclays the world's No. 6 bank by assets and give Charlotte, North Carolina-based Bank of America the most market share in Chicago, the third-biggest U.S. city. While the decision is a setback for a group led by Edinburgh- based Royal Bank of Scotland Group Plc, which offered 70.9 billion euros for ABN Amro, Royal Bank said in a statement that it plans to make a revised offer.

Executives at Royal Bank, Banco Santander SA and Fortis ``have put too much effort into this deal to simply walk away,'' said Len Riddell, who helps oversee $26 billion at Edinburgh- based Martin Currie Ltd., which owns Barclays and Royal Bank shares.

ABN Amro's stock rose 1.5 percent to 35.85 euros in Amsterdam, exceeding Barclays's bid of 34.48 euros and indicating that investors anticipate a higher offer. Barclays shares rose 0.8 percent to 724.5 pence in London, valuing the company at 47.4 billion pounds ($96 billion).

`One Step'

Shares of Royal Bank, Britain's second-biggest lender, rose 0.9 percent to 640 pence in London. The group has offered 38.37 euros a share in cash and stock for ABN Amro.

Royal Bank, led by CEO Fred Goodwin, said its new offer will be ``materially superior'' to Barclays's bid and won't depend on what happens to LaSalle. The company said a further announcement will be made in ``due course,'' without being more specific.

The contest for ABN Amro isn't over, Chief Executive Officer Rijkman Groenink said in a memo to employees today.

``I do not want to overstate its significance: it is still just one step on a long journey,'' said Groenink, referring to the court ruling. ``We do, however, hope to have more clarity in the coming months as the formal offers are made to the market and shareholders begin to tender their shares.''

Barclays, the U.K.'s third-largest bank, agreed to buy ABN Amro on April 23 in a deal that would double Barclays's revenue from consumer-banking, galvanize its push into markets such as India and Brazil, and boost securities trading. It is scheduled to send its formal offer to shareholders by July 23.

`Extremely Happy'

``We are pleased to see the Supreme Court has made a very clear ruling,'' Barclays CEO John Varley said in comments passed on by spokesman Alistair Smith. ``The ruling is definite and therefore removes uncertainty from the situation, which is good for ABN Amro customers and employees.''

For Bank of America, the second-largest U.S. bank after Citigroup Inc., the purchase of LaSalle would make it the biggest bank in Michigan and Chicago, ahead of JPMorgan Chase & Co. LaSalle would be Bank of America's largest acquisition since it bought MBNA Corp. for about $35 billion two years ago.

Bank of America ``is extremely happy'' with the judgment and aims to complete the LaSalle takeover as soon as possible, company spokesman Frans van der Grint said today.

Royal Bank's bidding group may now lower its bid by 1 euro a share, said Antony Broadbent, a London-based analyst at Sanford C. Bernstein & Co. In the revised bid, Royal Bank's group would receive $21 billion in proceeds from the LaSalle sale and wouldn't make a payment for breaking up Bank of America's deal, he said.

Divvy Up LaSalle?

Royal Bank may still try to buy some of LaSalle's U.S. assets, said Simon Willis, a London-based analyst at NCB Group. Bank of America is most interested in expanding its retail franchise in Chicago, while Royal Bank wants LaSalle's commercial-lending operation, he said. ``A sale of some parts is not entirely impossible.''

The Supreme Court's ruling comes almost three months after Dutch shareholder group VEB sought to block the sale of LaSalle to Bank of America by filing a suit with the Enterprise Chamber of the Amsterdam Court of Appeal. The lower court ruled in favor of the VEB, favoring Royal Bank. Barclays, ABN Amro and Bank of America appealed, sending the case to the Supreme Court.

Advocate General

The Advocate General, an adviser to the court, said last month that the sale didn't require shareholder approval. The Supreme Court followed that guidance in today's decision.

``The Supreme Court annuls the Enterprise Chamber's ruling and rejects the VEB's request to take immediate measures,'' Supreme Court Vice Chairman Hans Fleers said in The Hague today.

The ruling doesn't prevent shareholders from seeking to block the sale of ABN Amro to Barclays. Also, VEB has requested that Amsterdam's Enterprise Chamber appoint three independent supervisors to ensure a ``proper course'' of bidding for ABN Amro. The lower court said today it will consider the request at 1 p.m. on July 19.

VEB director Peter Paul de Vries, speaking to journalists after the Supreme Court ruling, criticized the decision.

``At this moment, it's very likely the LaSalle sale will happen, but the takeover battle is not over,'' De Vries said.

Goodwin was counting on LaSalle to boost Royal Bank's U.S. unit, where profit is flat after $13.6 billion of acquisitions during the past six years. The group's offer for ABN Amro ``has been structured and built, crafted, designed, whatever you call it, around the inclusion of LaSalle,'' Goodwin said at a May 29 conference in London.

Splitting up ABN

Royal Bank also wants ABN Amro's Asian operations and corporate banking business. Santander, Spain's No. 1 bank, would expand into Italy and double its market share in Brazil with the acquisition of ABN Amro. Fortis, the largest Belgian financial- services company, is seeking the Dutch retail banking arm and ABN Amro's asset-management and private bank units.

Barclays and the Royal Bank-led group last week won extensions to July 23 for submitting formal offer proposals to shareholders pending today's ruling.

The court ruling set off speculation that other bidders may emerge for ABN Amro. Amsterdam-based ING Groep NV, Spain's Banco Bilbao Vizcaya Argentaria SA and New York-based Citigroup Inc. may make a joint bid for ABN Amro, the German newsletter Platow Brief reported today without saying where it got the information.

Officials at ING, BBVA and Citigroup declined to comment.

To contact the reporter on this story: Jon Menon in London: jmenon1@bloomberg.netMartijn van der Starre in Amsterdam vanderstarre@bloomberg.net; Ben Livesey in London blivesey@bloomberg.net

Last Updated: July 13, 2007 13:26 EDT