Why Buy Back Stock?
I'm not sure about the tax implications for the company, but for shareholders, a stock buy back has no immediate tax consequences, while an increased dividend would be taxed in the year paid. Theoretically, each share of stock would increase in price proportionally to the greater share of the company that it now represents following the buy back. In reality, stock prices are not that logical.
If I remember the numbers from the most recent financials, this buyback represents about 5% of the outstanding shares.