Its unlikely that is true, and may have been the result of what was happening at Bayern at the time. The key is in the detail from my statement below.
Only speculation at this point is whether or not Bayern were prepared to sell Kroos, or force him to play out his contract and leave on a free. It is 100% clear after that he would leave, his agent, the player, the head of the board and CE had all said he wouldn't resign a deal, they were deadlocked, with the club not going to give.
At first, while Kroos had flirted with mentions of joining United and the Premier League, its unsure whether or not this was done to force Bayern's hand at a new deal. What is clear is that, by May when Van Gaal joined, the aforementioned reaction from Bayern's top powers was clear..... no improved contract. The player wanted more, the board were not prepared to pay him more, and had reacted scathingly in the German press. Beckenbaeur and Ruminigge had indicated they believed the contract was fair, and seemed shocked or angered he wouldn't sign it.
At this stage in the contract stalemate, its unclear whether or not Bayern were actively selling him to cash in, or whether or not they were keeping him in the hope he would sign the deal.... and in the opposite, whether or not Kroos would hold out through the season for an improved deal when it was clear he would leave at the end of free. Both parties at this point, around the time Van Gaal is supposed to have said " I don't want him", seem to have switched to the waiting game, and with the World Cup, the question of him leaving is left.
Yet after this, there is a clear shift towards Bayern deciding to sell him. Ruminigge and another board member, I cant remember his name, had come out in June to state that they would not be prepared to lose Kroos on a free, and that essentially they had tried their best with the player to convince him to stay, but it was unsuccessful. The statements were issued in a "sorry guys, but you wont see him here next year". I think this was 4-6 weeks before he left to Real Madrid. By mid July Madrid all of a Sudden placed a bid and looked set to buy him. Had Manchester United? In conclusion, they must have. It was widely reported that Kroos had spoken to Van Gaal after Real Madrid's bid to persuade him to come to United still, he wouldn't have done that if they were not in talks, and I don't think he would have been able to approach the player had Bayern not been aware.
What is clear again though is, around this time Kroos agent does tell us that, on being asked if Kroos is a Madrid player, he answered that the player needed time to discuss the options with him, and that it was not known where he would be playing. Just to make it more certain he was at least weighing up two different club options, Bayern again at this stage announced that Kroos would be leaving having not had more discussions on an improved contact, so we know Bayern were never one of those options.
Personally, I think what this shows is Bayern knew they would lose their man, and a sensible and direct bid at the end of May bought him the player, yet they stalled or did not bid high enough for Bayern to consider the player a lost cause. When Real Madrid came in for the player in July, by this stage after the World Cup, they knew they either had to pay him 300k a week or lose him on a free, and accepted the first bid that matched the valuation.