CI Financial, one of the country's biggest mutual fund companies, has unveiled a $254 million takeover offer for rival Clarington Corp.

CI (TSX:CIX) said Clarington (TSX:CFI) shareholders can elect to receive $13 cash per share or a combination of cash and CI common stock.

Clarington shares jumped to $12.61 on the TSX, up $4.61. CI was up 24 cents at $21.56.

The offer price amounts to 62.5 per cent premium on the Oct. 28 closing price on Clarington's share price, CI said.

"Upon completion of the intended offer, Clarington unitholders will benefit from significant management fee reductions within 12 months as the Clarington funds are aligned with the lower cost structure of existing CI funds," CI said in a release.

As of the end of September, CI Investments had $49.75 billion in assets under management, ranking it third among Canadian mutual fund companies by assets, while Clarington Funds had $4.25 billion, ranking it 21st.

CI Financial recently postponed its plan to convert into an income trust following the federal government's decision to review the rules governing trusts.

The Canadian mutual fund industry has seen several consolidations recently. In 2004, Investors Group, Mackenzie Financial and Counsel Wealth Management merged into IGM Financial, the largest fund company in Canada.