The reason that the offer was nixed was because they wanted to retain their independence.
It would really be interesting to know when the offer was tendered, whether it was before or after the acquisition of MySQL’s DB engines (INNODB and Berkeley DB).
Let’s face it, with the recent enterprise features added into MySQL (stored procedures, triggers etc) it was in fact evolving to be an Oracle killer. Plus the fact that it’s free and used in almost all web sites as a backend.
This was Oracle fighting for survival.
From tech.memeorandum866 [source]