The coronavirus outbreak is wreaking havoc on yet another corner of finance: hedge funds that wager around deal-making. Funds focusing on merger arbitrage are posting losses as plummeting share prices are causing deal spreads to widen sharply. Investors are fretting that some of the biggest deals could collapse or be renegotiated. That’s meant a swift reversal of fortune for many managers. After event-driven funds gained 8.2% last year, they’ve plunged 18% this year through mid-March, according to Credit Suisse Group AG’s prime services.