Senior officials of Tata Sons, the group's holding company, and Tata Tea, through which funds for the proposed acquisition will be routed, on Friday approved hiking the bid price by 10 million pounds to 280 million pounds (approximately Rs 1,900 crore).

It is learnt that the deal, which was expected to be sealed by end-June, has got delayed as Schroders Private Equity Fund has been pressing for a price of around 300 million pounds, which the Tatas have so far been refusing to pay up.

In the initial bidding process, the Tatas had far outbid their closest rival Sara Lee, the US-based FMCG major which had put in an offer price of around 200 million pounds.

The proposed deal is expected to be funded through a mix of domestic and foreigndebt. The Tatas, it is learnt, have been gearing up to make presentations to both foreign banks from Friday itself for syndication of overseas loans, as well as domestic banks for term loans.

Because of the size of the deal, Tata Tea will not be funding the acquistion alone. The company has a net worth of Rs 379 crore, including reserves of Rs 330 crore, its net profit stood at Rs 102 crore on a turnover of Rs 869 crore in the last fiscal.

Tata Sons, as reported earlier in The Financial Express, is likely to convert one of its two Switzerland-based subsidiaries -- Tata International AG or Tata Enterprises (Overseas) -- into a special purpose vehicle (SPV) which will subsequently raise funds by securitising the future cash flows of the Tetley Group.

The SPV could also issue bonds to mutual funds or private equity funds on the strength of the balance sheet of Tata Sons.

Tata Sons and group company Tata Chemicals are also expected to pitch in the debt raising programme.

The proposed deal, if itmaterialises, will be the largest-ever acquisition by an Indian company abroad. The move is part of Tata's group strategy to bolster its agro-business, and will enable Tata Tea to establish a global presence.

Tetley, the blending and packaging major, has significant market shares in Europe, the UK and Canada. Tata Tea, on the other hand, has strengthened its presence in North America through its US-based subsidiary Tata Tea Inc.

Besides being tea, Tetley is also a large player in the world coffee market. Two of Tata Tea's subsidiaries - Consolidated Coffee and Asian Coffee - are major players in the Asian market.

In India, Tata Tea has a joint venture with the Tetley Group - Tata Tetley - which manufactures tea bags and packet teas for both the domestic and export markets.

The financial strength of Tetley can also enable Tata Tea to make large acquisitions abroad, as in recent months, the Tata group major has been eyeing tea gardens in Kenya, Uganda and Mozambique. It already owns around 20 gardens inSri Lanka.