Just keep taunting him. You can continue to taunt successfully (although it takes longer) even when his disposition is zero. When you have finally taunted him enough, the dialogue will close with the words (in red) 'Goodbye'.
NB - Let him get the first blow in! (Sometimes if you hack first, the guards assume that *you* started the fight).
Oh - and one trick to get the taunt to work faster is to bribe the disposition back up to 100 and then taunt. Sound expensive? It isn't - you can retrieve your gold back from the body afterwards!
