Greencross rejects $740 million takeover bid from TPG

The bid comes as Greencross is widely expected to launch an auction for the company, inviting the likes of TPG and its rivals to make bids. However, sources said there had been little real evidence that Greencross was preparing for such a process.

It has also come at a convenient time for the group, with its shares trading higher despite market volatility in late December and January. Given the challenging equity market conditions - and the fact a lot of fund managers' portfolios would be down for the financial year and calendar year-to-date, you would have to think Greencross' board and advisers would be under some pressure to engage with interested parties.

TPG's interest has underpinned Greencross' share price. The private equity firm has had Credit Suisse in the market buying shares at up to $6.45 each, according to a substantial shareholder notice filed in late December, and is sitting on a 6.9 per cent stake.

Interestingly, Credit Suisse isn't the most active broker in the market this year. Goldman Sachs bought $23 million of stock, worth about 3 per cent of the company, in the first three weeks of the new year.

Sources have questioned whether Goldman Sachs is buying on behalf of New Zealand's EBOS Group. As Street Talk revealed in December, EBOS met with Greencross chairman Stuart Bruce James as it considers its options.

Greencross shares are certainly trading like there will be a deal. The stock last closed at $6.81 - well above the $4.63 a share level when TPG made its first public move.