The Croatian has recently been linked with a move to the Allianz Arena, having put in a series of eye-catching displays at Euro 2012 before his country were eliminated.
The Bavarians have lost Ivica Olic this summer and re-signed Claudio Pizarro, but still want cover for main striker Mario Gomez. Having been priced out of a move for Manchester City's Edin Dzeko, they now are keen on Mandzukic.
But Magath coach insists the player's destination is far from decided, and that he would like to keep the 26-year-old at the club if possible.
"At this point in time it is a fact that there are some clubs interested in signing Mario Mandzukic," he told Deutsche Presse-Agentur. "Right now it is an open race.
"I am not preventing players from moving on. If there is definite interest, I have no problem with that, but, I do not want to get rid of him."