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New York/London (CNN Business)Elon Musk has made an offer to buy Twitter (TWTR) and take it private, saying he believes the company needs to be “transformed.”

According to an SEC filing, Musk has offered to acquire all the shares in Twitter he does not own for $54.20 per share, valuing the company at $43.4 billion. That represents a 38% premium over the closing price on April 1, the last trading day before Musk disclosed that he had become Twitter’s biggest shareholder, and an 18% premium over its closing price Wednesday.

Musk said the cash offer was his “best and final offer,” according to the SEC filing, adding that if it’s not accepted he would have to reconsider his position as a shareholder.

The Tesla CEO sent an offer letter to the company Wednesday night, according to the filing.

“I invested in Twitter as I believe in its potential to be the platform for free speech around the globe, and I believe free speech is a societal imperative for a functioning democracy,” he said in a letter he sent to Twitter. “However, since making my investment I now realize the company will neither thrive nor serve this societal imperative in its current form. Twitter needs to be transformed as a private company.”

The letter was addressed to Bret Taylor, the chair of the Twitter board, not CEO Parag Agrawal, who assumed that title last fall. It concludes: “Twitter has extraordinary potential. I will unlock it.” CNN

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Twitter issued a statement Thursday confirming that it had received the offer. The company said its board would carefully review the proposal “to determine the course of action that it believes is in the best interest of the company and all Twitter stockholders.”

Shares of Twitter (TWTR) shot up as much as 13% in premarket trading on the offer Thursday, but soon retreated to a gain of about 7%, suggesting that investors had doubts the bid will be accepted.

But it will be difficult for Twitter to reject Musk’s bid at the price he is offering, said Dan Ives, tech analyst with Wedbush Securities.

“Musk is putting the Twitter board’s backs against the wall,” Ives said. “The premium is at a level that will be hard to see other bids occurring.”

But to get a return on a bid this high, Twitter would need to do more to bring in subscriber revenue and cut costs, Ives said. Musk’s commitment to use the company to promote greater free speech doesn’t do much, if anything, to increase its profitability.

“Musk making this about free speech is the exact opposite of what every other corporate raider would do about monetizing the company’s value,” Ives said. “It’s historic and bizarre at the same time.”

Last week, Musk disclosed he had been buying shares of Twitter since late January, and that he had accumulated a 9.1% stake since that time, spending $2.6 billion on the shares he purchased. After that disclosure, he initially accepted an offer of a seat on the board of the company, an agreement that included a cap on his investment in the company to a 14.9% stake.

On Sunday Twitter CEO Parag Agrawal disclosed Musk had decided not to join the board, which removed that limit.

Musk had been unusually silent on his plans for Twitter in the days since then. CNN

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