He challenges you in the ways of old which translates to:
"Im calling your ass out, I challenge you, but first, let me send out all my minions and a robo-spider to kill you and I'll just keep running away when you hurt me too much.
Oh...there's no more places to run an- .....thats a nice gjallarhorn you have there....."
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Theres a nice balcony you can hide on to kill the walker, use your ghost to open the door and you can hide out up there and not be shot by the walker. You will need to look out for a few enemies that spawn there though.