Mr Mercuriadis, a former manager of Beyoncé and Elton John, has threatened to trigger a call option that would give him the right to buy the company’s entire catalog of songs if his contract is terminated.
Blackstone added that it reserved the right to reduce its offer if Hipgnosis pays out any dividends to shareholders before the takeover takes place.
Qasim Abbas, senior managing director of Blackstone, said: “Our offer price, which has been unanimously recommended by the board, represents a significant premium to the unaffected share price and allows shareholders to realize immediate and attractive value for their shareholding.
“The offer is the result of extensive discussion and negotiations with the board and provides shareholders the certainty of cash today.”
Concord, which last year bought rival London music rights fund Round Hill in a $470m deal, will now be forced to decide whether to raise its offer for Hipgnosis or walk away.
The bidding war caps off a tumultuous period for Hipgnosis, which surrounded a boom in music rights but has since been thrown into crisis amid doubts over catalog valuations and questions over corporate governance.
In October, shareholders defeated the company in a bruising continuation vote, leaving the board with six months to lay out proposals for the fund or face being wound up
