King World Prods. is repurchasing up to 2 million of its common shares, or about 11% of its total, for about $ 112 million. The move makes sense, given KW’s excess cash hoard, says its chief financial officer.

The buyback program, which King World announced Friday, will be conducted through the open market and through private transactions with top management.

In a press release, the company said it already had repurchased more than 1 million shares from Roger King, its chairman, and another 1 million from Michael King, its president, among other toppers, at $ 32.50 a share, the closing price of King World shares Thursday on the New York Stock Exchange.

King World shares closed up 38 cents at $ 33.88 Friday, with 194,000 shares traded. That compares to a 52-week low of $ 22.13.

King World is among a handful of media companies with a huge cash hoard relative to its overall size, with $ 356 million in excess cash compared to annual revenues of $ 500 million. A stock buyback is regarded as one way to put that cash to work and is expected to have the effect of increasing the company’s earnings per share.

“We view that cash as giving us substantial flexibility in any financial environment,” said Jeff Epstein, King World’s chief financial officer.

“Ironically, the worse the general financial environment looks, the stronger we look. If interest rates start going up and banks are unwilling to extend credit and companies with a lot of debt look to refinance, companies like ours are in a terrific strategic position.”

The company bought back $ 160 million of stock in 1987-88 to boost its share price. It has over 38 million common shares outstanding.

As for its cash hoard, the company, unlike others, doesn’t rely on in-house expertise. Instead, it farms out most of it to six money managers, who compete against each other for a return that’s now a little more than 4%, says Epstein.

The cash is earning about $ 8 million after tax in interest income.

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