The troubled owner of music back catalogues ranging from Beyoncé to Neil Young has said that it would accept a takeover offer from Blackstone, after the private equity investor revealed it was considering outbidding a rival rights owner’s deal.

Hipgnosis Songs Fund (HSF) put itself up for sale after a turbulent period on the London Stock Exchange, and now faces the prospect of a takeover battle after saying on Sunday it would back Blackstone’s approach over last week’s agreement with Concord Chorus.

The US rights investor, which owns or administers about 1m musical works for artists ranging from Phil Collins to Cyndi Lauper, had agreed a $1.4bn (£1.1bn) takeover deal on Thursday. However, on Saturday, Blackstone said it was considering a counteroffer worth $1.5bn.

Hipgnosis was founded in 2018 by Merck Mercuriadis, the former manager of acts including Elton John, Iron Maiden, Guns N’ Roses and Beyoncé. Hipgnosis spent millions buying the streaming rights of a succession of famous musicians.

The sales provided the artists with an immediate payout on their hits rather than waiting for the streaming revenues over the years. Hipgnosis’s business model relied on using the future streaming revenues to pay a steady income to shareholders.

However, it was derailed by rising interest rates and changes to the valuation of its songs, leading to turmoil and shareholder rebellion, with its investors voting in October against continuing the struggling fund in its then form.

HSF said on Sunday said that it had “indicated to Blackstone that the proposal is at a value that it would be minded to recommend to its shareholders should Blackstone announce a firm intention to make an offer”.

However, the company said there was no certainty that Blackstone would confirm its proposed bid. Until a firm offer comes on to the table, Hipgnosis said it continued to recommend the Concord Chorus deal to shareholders.

Saturday’s proposal is not the first time that Blackstone has tried to take ownership of Hipgnosis assets. In September, Hipgnosis agreed to sell part of its catalogue to a partnership between Blackstone and Mercuriadis, only for shareholders to vote down the deal and force Hipgnosis to put itself up for sale.

The situation is further complicated by the fraught relationship between HSF and Hipgnosis Songs Management (HSM), a company that was set up as the manager and investment adviser to HSF but which was removed by shareholders. Blackstone owns a stake in HSM.

Blackstone said that HSM has an option to buy the Hipgnosis assets for six months after the end of the investment adviser agreement. On Saturday, Blackstone threatened legal action if Hipgnosis proceeded with the Concord Chorus deal and prevented HSM from buying the songs.

Blackstone said that it and HSM “remain confident in the enforceability of the option”, and that it “will vigorously defend HSM’s rights pursuant to the option if required to do so”.

Concord Chorus was approached for comment.