TL:DR: The Big XII told all the candidate schools “thanks... but no thanks!”
Full USF statement here:
TAMPA, Fla. (Oct. 17, 2016) - Earlier today, the Big 12 Conference Board of Directors decided not to expand conference membership at this time. The University of South Florida will remain a member of the American Athletic Conference.
“On behalf of the entire USF System and Tampa Bay community, I would like to extend our thanks to Big 12 Commissioner Bob Bowlsby and the leadership of the Big 12 Conference for their thoughtful interest in our university and the Tampa Bay region.