Real Madrid Castilla coach Raul rejected Villarreal last week.
Raul appeared set to take the Villarreal job after their sacking of Quique Setien.
Real Madrid granted Raul permission to speak with Villarreal and a meeting was held.
AS says Villarreal made an offer to Raul, but while impressed, he chose to turn it down. The Spaniard wasn't entirely convinced by the job prospects compared to what he has at Real Madrid.
As such, Villarreal named Pacheta as new coach on Saturday.