Conversation and Question

I had the weirdest conversation the other day. There is this guy that works where I work. I have seen him flirt with so many women. He acts really...ho...ish.....yep that pretty much sums it up.

My question
How do I deal with this guy?

Here is a recap of conversation

First him and another guy were talking about me right in front of me like I was clueless to what they were saying..
It went something like this..
"hey, if you like it, go for it, I did it back in the day"...The other guy just talked in hushed tones....

Then the approach.

He starts off..
"hey pretty eyes"..
then..
"oh, I know you have been checkin out my facebook picture right?"..(which I haven't)..I just nodded no.
Then him
"check this out..In my facebook picture I have a purple towel on with nothing underneath." (Im trying to act non interested which really I am)..
then him..
"look, look..with his eyes really big.."you want me to take off my shirt don't you?"..I just look at him with no response..
Then him
"look look, I had no shirt on and there were water droplets coming all down my chest and there was this girl behind me just lookin"
at that I told him he was trying to be like Snoop Dog..LOL
He replies
"No, Im bigger than him"..
(I think to myself ..oh really? wow..I don't think so..I mean really, Snoop is a big time rapper/singer etc etc)
Then he keeps going on about his purple towel..yada yada yada
and I reply
"okay okay"....
He finally left..
Oh and inbetween all of this conversation the other guy is lurking around.....LOL
Im like really???
So once again.....my question
How should I respond to this dude? I know he is a big flirt because I have witnessed him saying even worse things to other women.....
Im thinking if I tell him
"it will never happen between us"..he might think this is a ploy of mine to play hard to get which I don't play games.....
please any advice?