racedo,
The share price will only rise if the capital returned is truly surplus to requirements. Remember that when a company buys back shares, its assets (ie that which generates the profits) also fall. If the return on assets/return on equity falls in the same proportion as the shares bought back, then EPS will remain the same, eg if £100 of assets represented by 100 shares generates £10 profit (10%RoA/RoE), then EPS is 10p. If 10 shares are bought back for £10 and RoA remains at 10%, then post-buy back assets will be £90, shares in issue 90, profits £9 (ie 10% of £90), and EPS remains at 10p (£9 profit divided by 90 shares).