> They were close and had potential, but we also saw some gaps.

I would be really interested to hear more about the specific "gaps".

> After lots of discussion with my management chain, we decided not to extend the offer.

I wonder exactly what was said, given that this candidate was led on for months by this point and I presume the management knew about everything along the way. Also, was someone else hired, or did they just cancel the entire opening?

I understand some emotional pain about passing up a really nice candidate for an objectively unbeatable one (that's competition for you), but I only get the sense that it was a single person in the interview loop (who was then cancelled on): they were apparently hiring for just one extra manager position?