I'm not a securities expert, but depending on how options contracts are worded, a stock buyback might increase the value of options awarded to executives, whereas a dividend is more or less a net negative.
Apple also already does stock buybacks [1]... $150+ billion worth since 2012 and plans for tons more in the future.
Investors like consistent (and increasing!) dividends, a one time windfall from overseas cash coming back won't let you raise the dividend forever. They could do a one time special dividend, but that's still less efficient than a buyback from management's perspective.
Dividends are taxable and you can't choose when to pay that tax, capital gains are only taxed when you sell which lets investors put off having to pay tax. The idea being buying back shares and retiring them will make the remaining shares more valuable.
You mentioned it might make options more valuable... Well that's a feature not a bug, at least if you're the one getting the options (which the people who decide what to do certainly are!). All the more reason for a buyback.
