Twitter shares popped over 5% on Monday after the company's board unanimously accepted Tesla CEO Elon Musk's $44 billion offer to take the social media giant private.

Under the terms of the agreement, Twitter stockholders will receive $54.20 in cash for each share of common stock that they own upon closing of the proposed transaction. The purchase price represents a 38% premium to Twitter's closing stock price on April 1, the last trading day before Musk disclosed a 9.2% stake in the company.

Musk has secured approximately $46.5 billion to finance the transaction, including $25.5 billion of fully committed debt and margin loan financing and $21 billion in equity financing. The transaction is expected to close in 2022, subject to the approval of Twitter stockholders, the receipt of applicable regulatory approvals and the satisfaction of other customary closing conditions.

Twitter independent board chairman Brett Taylor said the company "conducted a thoughtful and comprehensive process to assess Elon's proposal with a deliberate focus on value, certainty, and financing."

Musk, a self-described "free-speech absolutist," has been critical of the platform and its chief executive Parag Agrawal's approach to free speech.

"Free speech is the bedrock of a functioning democracy, and Twitter is the digital town square where matters vital to the future of humanity are debated," Musk said in a statement. "I also want to make Twitter better than ever by enhancing the product with new features, making the algorithms open source to increase trust, defeating the spam bots, and authenticating all humans. Twitter has tremendous potential – I look forward to working with the company and the community of users to unlock it."

Elon Musk and Parag Agrawal

Though Musk was initially invited to join Twitter's board, he later declined the offer. If he joined, Musk would have been unable to own more than 14.9% of Twitter's stock while serving on the board or for 90 days after. Musk's board term would have expired at Twitter’s 2024 annual meeting.

Following Musk's offer, Twitter adopted a limited duration shareholder rights plan, commonly referred to as a poison pill, to prevent him or any other entity or group from acquiring beneficial ownership of 15% or more of Twitter's outstanding common stock in a transaction not approved by the board.

Along with Musk's announcement that he lined up financing for a potential deal, he revealed that he was considering a tender offer to acquire all of Twitter's outstanding common stock.

The agreement comes ahead of Twitter's first quarter earnings report on Thursday before the market open. In light of the pending transaction, Twitter will not hold a corresponding conference call.

Musk told the TED2022 conference earlier this month that he intends to keep as many shareholders on board as possible through a private company.