The UK bank turned down the informal bid from its French rival, claiming that it was too low, the Independent reports.
According to the newspaper, A&L CEO Richard Pym spurned the offer, made during the past two weeks, as failing to reflect the company's true value, which he estimates at around 1,500p per share.
The high street bank's shares rose to a record high following news of the offer and rumours that Spanish banking giant Banco Santander Central Hispano might be considering making a move for A&L of around 1,400p a share.
If Santander were successful in making a bid for A&L, it would control approximately a fifth of the UK's mortgage market, as the group already owns high street lender Abbey.
Alliance & Leicester reported pre-tax profits of Â£547 million for 2005, a seven per cent fall on the previous year.