Professor Hilmer said in his seven years at the head of Fairfax there were regular reports the Packer group was moving in, but it never happened.
He said the board had prepared for such an eventuality.
The Fairfax board held an emergency meeting yesterday amid looming changes to Australia's media landscape, and speculation Fairfax could become a takeover target.
"That work has been going on for some time and I am quite certain that David Kirk, my successor, has continued that and they are in reasonable shape to respond," Professor Hilmer told ABC radio.
Professor Hilmer, now vice-chancellor at the University of NSW, said he had no knowledge of any possible Packer move.
He said that was the oldest rumour in the game and in seven years at Fairfax he was regularly told of Packer plans.
"If a move on Fairfax were to be made, it didn't necessarily require this structure," he said.
"Basically the Packer group has sold down half their interest but to a financial partner not an operating partner and sold it into a venture that is likely to have quite a lot of debt,” he said.
"Whether that actually leads to any dramatic restructuring or whether it simply leads to the business being managed for cash is something that is still to be seen," he said.